Retired Documentation: You are using the documentation for version 1.7.3 which was retired in 2013. Go here for the latest version documentation or check here for your available upgrades to ExpressionEngine 3.
ExpressionEngine stores all dates and times in UTC (Universal Coordinated Time), formerly known as GMT (Greenwich Mean Time). The benefit of doing so is that each member of your site can choose their own time zone and date localization settings. This permits entries and other information containing dates/times to appear in each member's local time. All dates are offset in real time for each user viewing your site.
If people browsing your site are not members, or if they have not set a time zone preferences in their personal profile, the times will instead be shown according to your master system localization settings found in the Admin > Localization Settings area of your Control Panel. If you prefer that the localization settings of a particular member be used as the site default this can be specified in the My Account > Administrative Options page.
If you do not wish to permit your members to set their own localization preferences you can disable the feature in the Admin > Membership Preferences page of the control panel. When disabled, the localization preferences page will not be accessible to members in their member profile area.
A note regarding Daylight Saving Time (DST).
Since dates/times will adjust themselves automatically to your local time, an issue can arise if you view or edit weblog entries with dates that fall outside your current Daylight Saving Time setting. In order to compensate for this EE stores whether DST is active or not on the date that an entry is posted. You'll find this setting in the PUBLISH page under the options tab. Although it will set itself automatically when you post entries, if you find yourself editing the date of an entry, changing it so that it falls outside the dates that DST is active in your area, you may need to enable or disable this preference for that entry otherwise the time may be off by an hour.