There are three code pools local, community and core

Core – The core folder contains all the default Magento modules which come with the standard installation. This should be for the core developers only and should not be edited in any situation.
Community – The community folder contains 3rd party modules or could be modules you have developed yourself. The name refers to community as the modules should be from the Magento community.
Local – These are your own modules which are supposed to be specific to your current project. You would use the local code pool for any overrides