Need explanation for the following statement

All,

Pls read the following para and explain in simpler term " SAP recommends that all SAP system and database hosts are members of a single windows domain.This is valid for all sap system setups,whether standalone central system or distributed systems.In the single domain model,SAP ERP central component and the use accounts are included in a single domain.For performance and security reasons,no sap instance or databse instance should run on the domain controller".

Can we install central instance on separate machine ,dialog instance on other and database on another machine?