Apple Mac OS X Server (Administrator’s Guide) - Manual (Page 67)

Directory Services 67
Whether you use Workgroup Manager or System Preferences to create a user account, the
user information is stored in a directory domain.
When someone attempts to log in to a Mac OS X computer, the login process uses Mac OS X
directory services—Open Directory—to validate the user name and password.
A Historical Perspective
Like Mac OS X, Open Directory has a UNIX heritage. Open Directory provides access to
administrative data that UNIX systems have generally kept in configuration files, which require
much painstaking work to maintain. (Some UNIX systems still rely on configuration files.)
Open Directory consolidates the data and distributes it for ease of access and maintenance.
Directory
domain
Directory
services
Accounts
Accounts