Difference between Central and Local Repository

Dear Experts:
I'm relatively new to Data Integrator world. The question I have is around setting up a new Central Repository. As I understand, the steps involved in creating a central repository are: 
1. Setup as a DI account (e.g. PRODREPO) 
2. Create Central Repository tables
My question is how does the DI application know that PRODREPO is a central repository and not a local. What differentiates a local vs. central repository?
Any help or pointers is greatly appreciated.
Thank you.

repository type is stored in the DI repository, using which all DI application differentiate a local, profiler, central repository
certain functions are not applicable to central repo like Job Execution, Login from Designer, Adding to Job Server

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