Local Directories vs Replication

[Weaju]

I am new to EA and hope my question makes sense.
Please correct me if I am wrong.
I am studing the replicate function on EA. So far I think it works by me creating a new project on our network drive after our base model and making it the Design Master. Our developers can then go into EA and and create new replicas.

Whenever they want to synchronize with the Design Master they select tools/manage.eap files/synchronize replicas. the select the Design Master replication occurs.

If this is correct then how do I use the Local Directories function and what is it good for?