An admin agent is similar to the network deployment manager (dmgr). An admin agent provide a single web console to admin one or more nodes. However, the administrative agent and application servers must be on the same machine, so you can only manage nodes that are on the same machine as the admin agent.
To create the admin agent, you would create the admin agent profile on the same machine as the nodes. You could create the admin agent profile on WAS that is already installed on the machine, or you could install a dedicated instance of WebSphere just for the admin agent. Application servers and admin agent must be same version, so if you are going to install a dedicated instance of WebSphere, you'll want to ensure it's at the same product version.
Admin agent is not intended for production. In production, you would use a dmgr to manage nodes. Admin agent is intended for development and unit test (non-prod).
It is important to recognize that a node can only be managed by an admin agent or the dgmr, but not both.
Another important consideration is that the admin agent and nodes must be on the same version of the product.