Sure thing! I Gatsby generates static HTML files from 1 or more data sources, which can be a filesystem or an API. When a Gatsby build runs, as long as it can access the API in question, then it can pull the content needed to generate a build. Once that build is completed, the resulting directory can essentially just be dragged and dropped (literally, in the case of Netlify) onto a hosting platform.

You can absolutely run all of these things locally and have no code running in production at all, if that's what you want to do!

The benefit of having your content API in production is that it can be accessed from anywhere, by anything - which opens up a lot more usecases.

Best way to get a handle on it all is to play with the starter repo, which should be fairly easy to get up and running: https://github.com/tryghost/gatsby-starter-ghost