Local Accounts

There are very good reasons to sign into Windows 11 using a Microsoft account---security and convenience key among them---and, of course, Microsoft makes it very hard to do otherwise. But it's still possible to use Windows 11 with a local account---sometimes called an offline account---if you prefer that configuration for some reason.
To be clear, we do not recommend that most people sign into Windows 11 with a local account as you will have a better---and safer---overall experience using a Microsoft account. Only power users who really know what they're doing should even consider using a local account. But even then, they should know better.
A local account is a Windows 11 sign-in account that exists only on the PC on which it is created. Microsoft sometimes refers to this type of account as an offline account because it can be created even when the PC is offline: when you initially sign into Windows 11 with a Microsoft account or work or school account, you must be online so that you can authenticate your user credentials with Microsoft or your organization.
What changes when you use a local account
For the most part, a local account looks and behaves much like a Microsoft account. But some of the key differences include:

No password required. You are not required to protect a local account with even a simple password, making the system far less secure. This is a particularly bad problem if you give the local account administrative capabilities over Windows 11.

No two-step verification. Where your Microsoft account (and work or school account) can be---and should be---protected with two-factor authentication, which makes your account and the personal data it protects more secure, a local account is not (and cannot be).

No device encryption (with Windows 11 Home). When you sign into Windows 11 Home with a Microsoft account, the PC's storage is automatically protected with device encryption, a full-disk encryption solution that helps protect the documents and other data that you store on your PC from being stolen or otherwise accessed by others. When you sign in with a local account, your PC's storage is not encrypted, and cannot be after the fact because the recovery key for this encryption has to be stored online in a Microsoft account.
If you are using Windows 11 Pro with a local account, you can enable BitLocker drive encryption manually after the initial sign in. This is done via the BitLocker Drive Encryption control panel, which can be found with Search.
No account recovery. Because your Microsoft account is protected by Microsoft, you can recover your account if you forget your password or the account is somehow compromised. There are no such protections with a local account, and if you forget your password or lose it, you're simply locked out of your PC.

No settings sync. When you sign in with a Microsoft account, Windows 11 syncs a limited set of settings---accessibility settings, saved passwords, language preferenc...