A blockchain, originally block chain, is a growing list of records, called blocks, which are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data (generally represented as a merkle tree root hash).
Why build a local network
While one is still learning how to interact with the Ethereum network, how to build ÐApps and how to write smart contracts one can use one of the several test networks that can already be accessed by developers, working with them is not always easy. One would need to synchronize the state, you need to participate in mining and/or get some Ether from the faucets. Plus, one needs a constant internet connection. This makes working on these networks very hard if you are on the road. At first, the plan was to create a Docker image with a single node, which can be contacted with RPC. Due to the great Ethereum documentation, this is achievable in an hour.