Initially, Active Directory was only in charge of centralized domain management. Starting with Windows Server 2008, however, Active Directory became an umbrella title for a broad range of directory-based identity-related services. A server running Active Directory Domain Services (AD DS) is called a domain controller. It authenticates and authorizes all users and computers in a Windows domain type network—assigning and enforcing security policies for all computers and installing or updating software. 

For example, when a user logs into a computer that is part of a Windows domain, Active Directory checks the submitted password and determines whether the user is a system administrator or normal user. Also, it allows management and storage of information, provides authentication and authorization mechanisms and establishes a framework to deploy other related services: Certificate Services, Federated Services, Lightweight Directory Services, and Rights Management Services.