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Tor, config file, SocksPolicy

Hi,
\ in etc/tor/torrc (the tor config file) we can read the following

# Entry policies to allow/deny SOCKS requests based on IP address.
\ # First entry that matches wins. If no SocksPolicy is set, we accept
\ # all (and only) requests that reach a SocksPort. Untrusted users who
\ # can access your SocksPort may be able to learn about the connections
\ # you make.
\ SocksPolicy accept 192.168.0.0/16
\ SocksPolicy reject *\

I don't understand, is this for the TOR network to query the local daemon ? or is it for LAN node to use the local TOR daemon ?

Thanks

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