What is the use of Server Name when we build or deploy the pacakge ?

Hi,
What is the use of "Server Name" when we build or deploy the package because all in the same
server map datasource ?.

on which situation we have to select the server name as <Machine name> - Logic instead of only machine name ?.

What are the differences among the <Machine  Name>,  <Machine  Name>- Logic,
 <Machine  Name> - RTE , <Machine  Name> - XAPI and LOCAL  on the basis of usage ?

I am attaching the screen shot for the better understanding of my uncompleted questions.

Thanks