I thought I made the cas e clear. However, let me put it another way. if I create a new database in Data. The device , whatever it is, will store that database as a file. We're not told what the file will be called, or where it's stored. Now a database is a store of knowledge, generally about data which is not a part of the device. it might be, say a database of a book collection, distributed about the house. The database will, perhaps tell me the Title, the Author, the Genre, the location of the bookcase and the shelf the book is on. All this data is relevant to things held external to the device, but the data is only local to that device. If I want to see this data on another device, I can copy it from the one to the other. But that gives me two databases, which are not linked to each other. If I add more book titles to one, I have to carry out the same exercise on the other. It makes sense to have the database source file held centrally, on a server, which the app on all devices can access. Since this is in Android, then theoretically (and hopefully, practically), this data can be accessed from any Android device. On my Linux machines, I have Calibre as my books database, and I can read any book therein whilst attached to the LAN. Now, Calibre is a physical database, it holds the actual book file, whereas Data is a knowledge database which holds only information on the book, and not the book itself.
In the days of yore (not very lonhg ago, you probably only had one device, and a database on that device was sufficient, but now, with most of us having a number of similar devices, phones, tablets desktop machines it makes sense to have central storage and access.