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Microsoft recommends that access control to computer resources be administered by using groups. In this way, many users that have similar needs for resources can be dropped into a group that has the correct permissions already configured instead of individually modifying each user account.

Group permissions to access resources are configured using group policy. A policy usually addresses one very specific aspect of a system's configuration. There are many policies that can be configured for a group to control system access and behavior.

Local group policy addresses only users who are physically logging into one particular machine such as the server itself or a stand alone operating system. To log into a machine locally, a user must create a unique ID/Password pair that authenticates the local user to the local physical system. Once authenticated to the local physical machine, group policy according to which local group the user is assigned is initiated.

Domain authentication as well as domain group policy is maintained centrally by the server for the domain. Even if a user has configured a local ID/Password pair for their local physical computer, a different and unique ID/Password pair is created to log onto the domain. When a domain user is created, they also must be assigned to a domain group. Once the server for the domain authenticates the domain user, the policy for the domain group the user belongs to is initiated. These policies are centrally administered by the domain administrator instead of each computer in the domain being configured separately for each user. Domain group policy can be configured to control access and behavior for any resource on the entire domain including resources on client computers. Local group policy can only control what is on the local machine at which a user is sitting. Finally, domain group policy supersedes any local group policy.

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Q: Difference between a Local Group Policy and a Domain Group Policy?
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