Network Time Protocol is by far the most widely used application for synchronizing computer time across local area networks and wider areas networks (LANs and WANs). The principles behind NTP are fairly simple. It checks the time on a system clock and compares it with an authoritative, single source of time, making corrections to the devices to ensure they are all synchronized to the time source.
Selecting the time source to use is perhaps the fundamentally most important thing in setting up a NTP network. Most network administrators opt, quite rightly to use a source of UTC time (Coordinated Universal Time). This is a global timescale and means that a computer network synchronized to UTC is not only using the same timescale as every other UTC synchronized network but also there is no need to worry about different time zones around the globe.
NTP uses different layers, known as strata, to determine the closeness and therefore accuracy, to a time source. As UTC is governed by atomic clocks, any atomic clock giving out a time signal is referred to as stratum 0 and any device that receives the time directly from an atomic clock is stratum 1. Stratum 2 devices are devices that receive the time from stratum 1 and so on. NTP supports over 16 different stratum levels although accuracy and reliable decrease with each stratum layer further away you get.
Man network administrators opt to use an internet source of UTC time. Apart from the security risks of using a time source from the internet and allowing it access through your firewall. Internet time servers are also stratum 2 devices in that they are normally servers that receive the time from single stratum 1 device.
A dedicated NTP time server on the other had are stratum 1 devices in themselves. They receive the time directly from atomic clocks, either via GPS or long wave radio transmissions. This makes them far more secure than internet providers as the time source is external to the network (and firewall) but also it makes them more accurate.
With a stratum 1 time server a network can be synchronized to within a few milliseconds of UTC without risk of compromising your security.