In OrthoGraph Architect you are always working on the particular room you are in. Therefore there is a structure behind the drawing which is based on the hierarchy of the site. The elements of this structure are the locations.
For a general use these locations are typically rooms, but sometimes they are building parts without the need of representation on the floor plan, like floor, apartment, building etc.
What are than they for? Two reasons: they are grooping the rooms, and they also bear some information (for example the floor can define the floor level allowing modeling multi-story buildings).
As said above, locations are placed in a hierarchical structure: Building->Building part->Floor->Apartment/Office/Shop->Room/Zone. You do not have to build up this structure, you can enter to it on different leveles: on Building level, on Room group level (Apartment/Office/Shop) or directly on Room level.
If you add a new location, you add it to the current level, or to a level below. By pressing the Edit button you can rename it, and by pressing the Property button on the bottom view bar you can change its properties also.