LOCAL = NO: non-local connection, namely a network connection. Listener connect to the server. Client application through the client listener listener sends a request to the server, the server listens received in connection with the database, perform related operations, the results returned to the client. This is the process by listening. So you need to configure the client listener that is configured tnsnames.ora.

LOCAL = YES: local connection. The local connection does not go listening, local sqlplus so in the case of services the listener does not start, or can connect to the database.

* (LOCAL=YES)(ADDRESS=(PROTOCOL=beq)))
Oracle server process initiated by a client tool/applicatoion local to the database host. Communication happens between client & the server via Bequeth protocol.

* oraclePROD (LOCAL=NO)
Oracle server process initiated by the Listener upon connection request from client tool/application.

In general, when LOCAL=YES, you have not used the listener to establish a connection (i.e. not used the tns alias in the connection string).

When LOCAL=NO, the connection was established via the listener.

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