In RHEL 5 and previous versions, yum install only accepted package names from enabled repositories, and did not accept paths to local RPMs; you had to use yum localinstall to install these.
In RHEL 6 and later, yum install accepts both package names and local filenames, so localinstall is no longer necesary, but it’s included for backward compatibility.
In RHEL 8, dnf localinstall is simply an alias for dnf install.