Local files are the files actually on your discs.
Nautilus can also show files from filesystems available through the GVFS system. This includes (but is probably not limited to):
Those are all not local files since the files them self reside on someone else's system.
Changing if preview should be shown for specific files is done on an extension or mine type based method through the command gsettings.
disable all thumbnails
gsettings set org.gnome.desktop.thumbnailers disable-all true
Disable PDFs
gsettings set org.gnome.desktop.thumbnailers disable "['application/pdf']"
(in early versions of Ubuntu when gsettings was introduced Nautilus did not abide these though). The manual method of turning thumbnails off would then be rm -r ~/.thumbnails && ln -s /dev/null .thumbnails
Just in case you are interested (but side stepping the answer): there is someone that made Gloobus Preview and it seems to have a bit more options.
Gloobus preview is an quick file previewer which supports many formats and preview them instantly. Currently it works better with nautilus and also with marlin file browser but many people don't use other file manager except nautilus.
It uses (/can use) gnome-sushi for thumbnails and this seems to generate them quicker than the how Nautilus does. Gnome-sushi seems to be installable seperate too (see the link).
(I did not test either of these programs though)