Local MCP is usually stdio: the client starts a process that can see your repo, browser or database. Latency is low; files and secrets stay on the box.
Remote MCP uses HTTP or SSE and is hosted by someone else. It fits official SaaS, team-shared read data, and runtimes you do not want on every laptop.
Prefer local filesystem for code and uncommitted files. Prefer official remote endpoints for cloud, CRM, payments and hosted docs, with a least-privilege account. Do not commit production secrets in mcp.json.
Entries on this site mark transport as stdio or http. Ask whether you need a local path or someone else’s API before you install.