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from the official devstack site http://docs.openstack.org/developer/devstack/local.conf.html

local.conf is a user-maintained settings file that is sourced in stackrc. It contains a section that replaces the historical localrc file. See the description of local.conf for more details about the mechanics of the file.

My understanding is the local.conf uses the metadata section that is much more flexible than localrc, especially when we need to do post-install configurations after the neutron service is restarted.

Hope that helps!

Vic