Like your other rails apps, Sapwood has a production instance and (potentially) multiple development instances. But with Sapwood, these two environments communicate with one another, in striving to streamline your site-building process. The idea of Sapwood's environments working together is its communicative workflow.
If you already have a live, production instance of Sapwood, then you'll only need to reference the development setup guide. If you are starting from scratch, you should have a look through both guides.