Space problem on hard drive

[AWS]

Windows xp sp3, build 2600, x86, system 32. Cannot defrag because there is only 2% free space on C (74.4 Gb capacity). Looking for files to delete and finding the size of files, I find Windows itself is using 67.2 Gb of space! That can't be correct. How
do I correct this so I can defrag?

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