We use Group Policy to tweak the default settings on Microsoft Servers and PCs. You edit the policies using the Group Policy Editor console (gpedit.msc) but to manage the policies you use the Group Policy Management Console (gpmc.msc). The more policies you start to create, the more confusing managing them can become and with each new version of Microsoft software (Office included) new Group Policy templates are added. This article is to give you an insight into exactly what the Group Policy Management Console (GPMC) is about and how everything links together.
It’s always best to edit policies from the latest OS. This is one of the reasons to always have a VM somewhere with the latest OS purely for Group Policy. Alternatively, if you are using the latest OS then you can install the GPMC from the Remote Server Administration Tools (RSAT) and then edit the policies from there. If you don’t, it’s not a big issue but some policies won’t be available. All of the templates can be stored in a central location in Active Directory so they can be accessed by all domain machines. There is some debate whether it is best to have the policies held locally rather than in the central store but I think it works well. By default this is \\DCName\sysvol\domain.name\Policies\PolicyDefinitions. If you ever download a new template you will need to put it in there. For more details on activating the central store se the following Microsoft Support article
Inheritance & Precedence
Group Policies Objects (GPOs) are created in the Group Policy Objects folder in GPMC. Policies are then linked to Active Directory Organizational Units (OUs). You can link as many Policies as you like to an OU and you can also link the same policy to as many OUs as you like. You can also block inheritance by right-clicking an OU and disabling it. The precedence of any GPOs, i.e. what GPO policy wins out of any competing policies, can be changed in the Linked GPO tab of an OU. Normally the deepest policy wins.