Files refers to the naming files normally found in a machine's /etc directory. These machine-based files contain UNIX user and password information, host information, mail aliases, and so forth. They also support Solaris-specific data such as the automount maps.
Under a files-based naming system, FNS context and attribute data is stored in files. These FNS files are stored in machine's /var/fn directory. (The /var/fn directory does not have to be on each machine, it could be exported from an NFS file server.)
Under a files naming system, you use FNS commands to work with the information in FNS files.