It could be.
A master component is usually added as the “parent” component as either a place holder or can be replaced with an object that all other components that are added can be added that will “inherent” from the master component.
In your example if you add a rigged character as a body object it can then be animated or changed relative to world space as to scale or position. If you add another component, like a helmet, as a child it will inherent in local space relative to the parent as to what has been attached to it.
Think of it as dress up Barbie.
This more or less covers what I think you need to know.
