Why is Git falsely noting that my files are up-to-date?

git pull's job is to fetch new commits and merge them into the current branch. If the current branch is not outdated compared to the one you pull from, pull will say Already up-to-date. even if you have local changes in your working directory. git pull is concerned with branches, not the working tree — it will comment on the working tree only if there are changes which interfere with the merge.

Your description is insufficient to explain why it's not objecting to the existing index.html, but you should not take Already up-to-date. as meaning git thinks you have no changes. Instead, use git status to obtain a summary.

In order to understand the state of your branches, git branch -v is useful (it shows the commit ID and relation to each branch's upstream branch), or gitk --all for a graphical view of all commits.

If I understand correctly the following script should reproduce your issue:

mkdir test
cd test
git init --bare test.git
git clone test.git a
git clone test.git b
echo a > a/index.html
echo b > b/index.html
cd b
git add index.html
git commit -m add
git push origin master
cd ../a
git pull

The last git pull prints:

remote: Counting objects: 3, done.
remote: Total 3 (delta 0), reused 0 (delta 0)
Unpacking objects: 100% (3/3), done.
From /home/cyrus/tmp/test/test
 * [new branch]      master     -> origin/master

And the content of index.html has been silently overwritten:

cyrus:~/tmp/test/a$ cat index.html
b