How network methods work?

I am trying to learn about network with unity3d 5. I am using the tutorial at:

http://unity3d.com/learn/tutorials/topics/multiplayer-networking/player-health-single-player?playlist=29690

The player has a Health script with the method TakeDamage bellow. I don’t understand how is this method working. Is it been called only on the client? On all the clients? On client is calling another? If i add if (!isServer) return; does it mean the method will only be executed on the server but for the player been hit?

public void TakeDamage(int amount)
{
    currentHealth -= amount;
    if (currentHealth <= 0)
    {
        currentHealth = 0;
        Debug.Log("Dead!");
    }

    healthBar.sizeDelta = new Vector2(currentHealth, healthBar.sizeDelta.y);
}

The next page in that tutorial tells you how to sync the health to the server and to all clients. The page you linked to is a single player version.