When should i use npm with “-g” flag and why?

Question

I've started using npm for js package management recently. Although I do have a fair understanding of package management in different enivronments(lets say using apt, rvm/gem, pythonbrew/virtualenv/pip), I don't quite understand how npm fully fits in.

I would like to know more on how the "-g" flag works and why should I use it. As in most blogs and wiki, they refer to use "-g" when installing without explaining why, and I understand that these packages are installed globally.

• But why should I install these packages always globally ?
• What does it mean to install these packages without the "-g" flag ?
• What do I do to installed packages locally, lets say sandboxed for different projects ?
• How can I then, make a list of npm packages used in a project and bundle it in the project if I needed it to check it in with version control (if possible at all) ?