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This is like the 50,000th topic related to this and if you search you'll find lots of solutions because real life isn't a video game and more than one answer works. Getting it to install without having the space necessary is slightly complex and you will have to follow the step by step instructions provided.
What Steam downloaded was the installation files. Those are the files Zenimax decided to put on Steam, the same sort of files you would find on the DVD version of ESO. It's a compact and compressed download that needs to extract install, and for that it needs 87gigs free (the game's install requirement). It will not download 80 gigs of updates and your space will not be consumed after the installation.
All that is happening right now is the file path that Steam has set to launch ESO using is linked to an uninstalled version of the game. There are ways to get around this by for example changing the link and just running through the launcher directly while deleting the useless installation files.
Again, all of this has been explained before in detail, heck I've seen 10 of these just this week. I cannot further assist as my copy of the game is already installed through Steam and I can't point you to the exact folders and files to move because I have no idea what the folder originally looks like anymore.
Someone even said in another topic that you could just delete the Elder Scrolls Online folder and run the installer, which would only install the launcher and begin redownloading everything. I have no idea if this actually works, be warned. Other people did a hard drive swap or moved the files to a DVD for installation using Steam's extended drive functionality. Others just did the manual switch of the path Steam uses for the launch to the actual launcher that they downloaded from the ESO website which they manually copied over to the ESO folder.
Installers are pure convenience. They are the automated extraction and sorting of multiple files and folders. Yet if you're computer savvy, you don't need them. You could do everything manually and delete the installer while relinking Steam to the correct address.
If I had a computer with the original folder setup in front of me I could tell you what to do step by step. But I don't feel like uninstalling and redownloading an 87 gig game just to give you instructions.