What does mean in the context of proxy settings?

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I'm trying to bypass the proxy setting (Windows 2012) for all private IP addresses (e.g., & and I can't understand what is meant by local. The Internet Options check box has "Bypass proxy server for local addresses". I can't find any more information on what that means however. Is it local to your subnet? Or all "local" as in all private IP ranges? If it's the former, is there an easy way to bypass all private type IPs (so only internet traffic is proxied)? Edit, without using a PAC file.

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Most people don’t grasp that asking a lot of questions unlocks learning and improves interpersonal bonding. In Alison’s studies, for example, though people could accurately recall how many questions had been asked in their conversations, they didn’t intuit the link between questions and liking. Across four studies, in which participants were engaged in conversations themselves or read transcripts of others’ conversations, people tended not to realize that question asking would influence—or had influenced—the level of amity between the conversationalists.