On Premise deployments
A location is defined as a separate AD forest. So if you have 2 data centers, one in Europe and one in the US, and each has its own AD forest, our system can span both systems and forests.
This allows you as the hoster to offer location based services to customers (different from Region based, which is a different article). This also allows for dedicated deployments, where you are adding a customer who wants their own AD forest and services (if the customer is large enough). The customer will be on a completely separated AD system, but our engine will be install on that system to allow control and access to it, through the same front end.
The way this works is as follows. You will have a top level Engine, which has the Database, the front end web site, and the top level Engine on it, and just an AD server.
This top level system will not actually do anything except process all calls to downstream engines and systems. The other option is to use your existing forest and engine as the top level system.
Any new dedicated deployments that you do will only get an EPS engine installed on it. The top level engine will process all commands and pass them on to downstream engines. This means that a single entry point for the control panel can service all dedicated systems. If a user in a dedicated system logs into the control panel they will only see their own users, and services that are available to them.
If you are a company that does many dedicated deployments, this is an easy and efficient way to manage all those systems, as well as giving a way to manage users to the admins.
There is a detailed deployment doc that comes with your install that explains this more.