A local data area is a portion of space that is allocated for a job. Not all jobs use their local data area but some do. Each command within a job has access to the job's local data area. You might want to use a local data area if you are scheduling a job that previously required you to manually specify additional parameters. Use the local data area to specify the additional parameters so you do not need to manually specify them each time the job starts.
Refer to the online help for more information as you fill in details for the local data area.