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Currently I'm not able to use the group policy. Error Message: "To manage group policy you must log on to the computer using a domain user account"

There is no domain attached to this windows server. Although I've tried to create a forest but it does not work as well. I do not see the options of ADS in the system.

Am I doing it in wrong way.

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Group Policies require that you are using Active Directory. To install Active Directory you'll need to install DNS on the server, then install and configure Active Directory by running dcpromo.

Once it is installed you can use group policy. If you are just looking to edit the policies on a single server then simply edit the local security policy. This is done via the Administrative Tools > Local Security Policy.

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Since group policy at active directory are managed the remotely through a MMC snap-in. To configure this, you’ll need to go through a few hoops.

Refer to this link and hope it might help you out. http://www.techrepublic.com/blog/datacenter/managing-local-group-policy-on-windows-server-2008-core-edition/768

Group Policy Preferences Getting Started Guide http://technet.microsoft.com/en-us/library/cc731892%28v=ws.10%29.aspx

Slide share of group server http://www.slideshare.net/UnitekEducation/webinar-server2008july2012upload-version

http://www.activedirectorytutorial.net/

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