Manipulate entities according to the xyz coordinates from the axis the world itself operates on. Just like planet Earth, the game has a global - or default - set of axes. When you first place an asset and click on its Transform component, you will see its rotation is set to 0 - this means it is perfectly placed to the Global axis.
Manipulate entities according to the placement and rotation of the entity itself. Easiest to see on flat-edged objects, like walls and floors.
If an object is rotated 23 degrees from the global axis, its global xyz arrows will appear at odd angles, but local axis arrows will remain parallel to the object's edges.
Transform manipulator —> Use local axis