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I have installed Sitecore 8.2.7 couple of times. But recently I figured out that I might have missed the step in the following section, "Windows Authentication for Sitecore".

I am not sure what the "domain user" mean in this context. Is that something we need to create for a Sitecore instance or we can just pick up one of the existing domain user?

I am not even sure if I should choose ApplicationPoolIdentity for Identifier section in Advanced Settings in IIS.

Any thoughts on this?

Picture for domain user

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Local System Account is a very privileged account and you should avoid using a Local System account for SQL Server services.

Domain User Account is the Active Directory account created under your company domain. By using the windows domain account is easier to manage and much secure. Windows integrated security model for SQL server is a recommended way for SQL server security

You can't create a domain account in your local machine(if you are not a domain administrator), as only the AD administrator can create the windows domain account. But you can create your SQL logins from the Windows domain account when they are already in the AD.

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