When you run the HSQLDB Server, it creates the database(s) that you list in the server.properties
file. If you do not have this file or you do not specify a new database, a database, named test, is created.
If you use the server.remote_open=true
property when you start the server, you can connect to a new database and it is created by the server. For example, the URL can be this:
jdbc:hsqldb:hsql://localhost/newtest;filepath=file:C:/files/mydatabase
Which creates the set of files for mydatabase and allows you to connect also with this URL
jdbc:hsqldb:hsql://localhost/newtest
You cannot delete an existing database. But it is possible to drop the schema with all the tables and their data in the database.
See the Guide here: