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Rails uses a few config files. You can use these files to control the configuration of your application.
RAILS_ROOT/config/ - boot.rb - database.yml - environment.rb - routes.rb - environments - development.rb - production.rb - test.rb
The environment files are config/environment.rb and config/environments/*.rb
The schism
The configuration details are split up between one common file that is shared between the different setups(config/environment.rb), and individual files that are specific to different setups (eg. development, test & production).