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UTC, Universal Time Coordinated, is the world-wide scientific standard of timekeeping. It is based upon carefully maintained atomic clocks and is kept accurate to within microseconds worldwide. The addition or subtraction of leap seconds, as necessary, at two opportunities every year adjusts UTC for irregularities in Earth's rotation. Being the most precise worldwide time system, it is used by astronomers, navigators, the Deep Space Network (DSN), and other scientific disciplines. Its reference point is Greenwich, England: when it is midnight there on Earth's prime meridian, it is midnight (00:00:00.000000) -- UTC.
Local time is UTC adjusted for location around the Earth in time zones. Its reference point is one's immediate locality: when it is 12:00:00 noon Pacific Time in California, USA, it is 20:00:00 UTC, and 14:00:00 (2:00 PM) Central Time in Austin, Texas, USA. Many locations adjust for standard time or daylight-savings time.
For example, a comparison/conversion of your current local time (as reported by your system) to UTC:
Local: Sun Nov 27 22:58:25 EST 2005
UTC: Mon, 28 Nov 2005 03:58:25 UTC
Your local system time is 5 hours behind UTC.