When the LCG File Catalog is installed it can advertise itself in the information system as either a Local Catalog or a Central Catalog.
Local catalogs, as the name suggests, record the file replicas stored at that site's SEs only.
To setup local catalogs, which is what most Tier2 sites should do, just ensure that that the YAIM variables LFC_CENTRAL and LFC_LOCAL are empty.
For each VO, one site on the grid will publish a global catalog. This will record entries (file replicas or dataset entities, see Site Local Catalog Middleware) across the whole of the grid.
Data Location Interface
The Data Location Interface (DLI) daemon, now runs for both local and central LFC installs. If offers a web service to query the LFC about SURLs stored in the catalog. For central installs this is used by the Resource Broker to find sites matching any input file criteria in the JDL.