Group Policy Inheritance |link| -

For example, if you link a security baseline to the domain root, every user and computer within that domain will inherit those settings by default. This allows administrators to set broad corporate standards once at the top level while still allowing for specialized configurations at the departmental level. The Hierarchy: How Policies Are Applied

We create a GPO called Domain Policy and link it to the example.com domain. This GPO sets the password policy for all users in the domain. group policy inheritance