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I am reading the solidity docs here and I seem to be struggling to understand the following.

Data locations are important because they change how assignments behave: assignments between storage and memory and also to a state variable (even from other state variables) always create an independent copy. Assignments to local storage variables only assign a reference though, and this reference always points to the state variable even if the latter is changed in the meantime. On the other hand, assignments from a memory stored reference type to another memory-stored reference type do not create a copy

1)Isn't a state variable always stored in the storage? So what does the above mean by assignments between storage and memory and also to a state variable?

2) What exactly is a local storage variable?

pragma solidity ^0.4.0;

contract C {

    uint state_variable; // same as global storage variable

    function test() returns uint{
        uint local_variable = 10; //same as local storage variable
        return local_variable * state_variable;
    }
}

Is my understanding above correct? Is there a way to see if these variables are in memory or storage , I am looking at the disassembled op codes in remix IDE but unable to make it out.

Thanks!

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Value assignment to a variable can be done by either giving a reference or creating an independent copy. If it's a reference when the original one which is assigned to the variable get changed value of the variable also gets changed. Consider the following,

a = 10 // value of a is 10
b = a // variable b is assigned a value
a = 20

if the assignment above assigned a reference now the value of b will also be 20. If the assignment was done by creating an independent copy value of b will be still 10.

In the solidity doc what it says is if the assignment is between the storage and memory,or the assignment is to a state variable it will always create an independent copy. If it's a local storage variable it will only make a reference.

Referring to the example provided in the solidity docs, local storage variable is a variable defined inside a function. (The scope of the variable is limited to the function)

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