You have four basic options:
- Keep the block definitions inside the same model/file where these blocks are used. This option is called embedded blocks. It is the most popular option.
- Keep the block definitions outside the model/file where these blocks are used. This option is called linked blocks. North arrow and company logo are good examples of linked blocks. Many models/files can share the same linked block.
- Worksession files are similar to the linked blocks, but more sophisticated. They are used when many people edit the same model/file.
- Embedded and linked blocks. The blocks are defined both inside the model/file where these blocks are used and outside the model.
Your question is about the last option (4 = embedded and linked blocks). Sometimes embedded block has different definition than linked block. Rhino wants to know what to do when these definitions are different. Documentation of the BlockManager command explains these options. It is posted here: Block | Rhino 3-D modeling
You can display Rhino documentation in Rhino Help panel, as shown in the following screenshot.
CommandHelp command opens the Help panel. You can also open this panel (and other panels) by clicing gear icon shown in upper right corner.