Conditions are the foundation for policies. However, you don’t always want to check policies across every object available, such as every database in an instance or every index within every database. Conditions can also be used to specify the objects to compare the condition against, called policy targeting or target sets.
You can target a policy at the server level, such as instances that are SQL Server 2005 or SQL Server 2008. You can also target a policy at the database level, such as all user databases or all system databases.