Running power-shell script using command rule

Hi All,

I am trying to understand how the Command rule in scom 2012 working.

I have a power shell script that need to write an event on the agents event log, the script is getting an "ServerName" parameter (I used an existing source so there is no problem with the script).

The Script is located locally on the management server, rule is set to windows computer target with an override to specific agent, agent DNS Name is sent as parameters with the command.

Now, What is happening in the background?

SCOM knows to to go to the script and run it on the agent? 

Do i need to copy the script locally on the agent?

My Problem: No event are listed on the agents event log, if i changed the rule override to the management server itself - events are listed at the management server event log .

Thank you!