The company I work for uses Rancher and I'm new there. I'm trying to understand how it works and wanted to give it a try to install it "locally"! What is the best option to install it locally? There are various options and but I ended up more confused.

You have two options to try or rancher. You can install the rancher on your own k8s cluster or in docker. If it was me I would just use rancher desktop. Rancher works by installing an agent in the destination cluster. That’s how it manages it