Can a local user on a Windows machine be assigned User rights on adiff machine?

am trying the following out on XP SP2 machines:

I created a local user , "localUser" on a machine "machineA" which is
a member of a domain. On another machine "machineB", also a member of
the same domain, I tries to assign the user "localUser" a User right
using Gpedit.msc

When I click on 'Check Names', using the the name "machineA
\localUser", the name is accepted - i.e. no 'Name Not Found' error.

But, when I click apply, I get the Security Template warning message,
"Failes to Save Local Policy Database"

Does this imply that the right cannot be assigned to a local user of a
different machine?