Well, that's a bit more complicated than I thought. But thank you, that clarifies a lot for me.
A little more that you're overthinking things a little bit. But it's better to ask questions first before making permanent changes.
Normally what it does is resize the Windows partition to make it smaller and then use the empty space
So is there an option to somehow cut a space from C drive for Ubuntu?
Yes, and this is the default option. Unfortunately, it won't touch your D: partition, it'll only resize your Windows partition (you'll have a slider to determine how much space Windows and Ubuntu gets). So if you have very little in the D: file system, it's better to just move it over, delete that partition, and tell the Ubuntu installer to use the empty disk space. Or, you may want to increase your C: Windows partition a little bit, then use the remaining empty space. That's up to you, really.
Wouldn't it wipe already existing Windows and it's files,
Not by default, no.
don't you need to format drive for cutting away space into separate partition?
No, you don't format hard drives. You format a (create a new) file system inside a disk partition. So if you need the space, you can resize a partition. This consists of first resizing the file system to fit into the new smaller space, then resizing the partition, or first enlarging the partition and then increasing the file system's space to fill the new space.
But GNOME Partition Editor will do that for you, in the right order. You can still just think about resizing and moving the partitions to make the space you need for Ubuntu.
So the exact thing you need to do really depends on how much data you have in your D: partition and whether or not you need that much space for Ubuntu.
It's also useful to know that while Windows tends to discuss disks as partitions and assign them drive letters (it's really working with file systems), Ubuntu doesn't care about partitions per se and places file systems (which may be inside a partition or may just be inside a file) at certain points in the root directory.
It's vaguely similar to thinking that Linux only has a C: file system, and any other disk or partition you work with gets added somewhere in C:. That's not very accurate, but it's a good analogy.
Once again, a recent back up will help, and if you want to experiment with things, creating a virtual machine in VirtualBox and installing Windows with a C: and D: partition, making a snapshot, and then trying various Ubuntu install options is going to make things make sense very quickly.
