Lua scripting method for relative flight paths

I have been looking at the two examples available for a copter to fly in a circle. set_target_posvel_circle and copter-fly-vertical-circle

I am having trouble understanding if the copter navigates through an x, y, z vector coordinate system or in a lat, long, alt coordinate geographical system (like a mission file). The reason i ask is because i would like to ensure that the copter does not deviate over time from the copter location when i initiate the lua script.