Thanks for the reply - but I am mightily confused now!
Such is life!
That diagram has been posted on here before when I was having some programming problems and no-one has commented on the 12v input.
No doubt because the context of the problem was different and they were looking at the other connections and the code.
The "rectifier" is a small circuit board (don't ask what as I have no clue - it was given to me) that does provide a steady 5vdc.
Presumably a bridge rectifier/ reservoir capacitor/ regulator module. You will have to be careful - it may be capable of a single servo, but not necessarily more.
If I am reading your comment correctly, I need to power the Atmega328P direct with 5vdc via the USB port on the board, not the 5vdc connection on the red adapter board.
Well, no, that is limited by the capability of the rectifier on the Nano which feeds power from the USB port to the 5 V pin if you are connecting the other things (servos) to the 5 V pin. And it is indeed, inconvenient
Or can I connect my 5vdc power supply to the red adapter board where it indicates "use a local 5vdc"? That would be easier for me as I have limited capacity in the models wiring to add any more circuits.
That is indeed the preferred way of supplying 5 V to the board, it is the "5V" pin on the Nano. I got out a board to check - the blue one actually, but while less colourful than the one in the diagram, it is the same.
There is a caution that it may not be a good idea to connect 5 V to the "5V" pin while the USB is connected to a PC - especially a laptop - for uploading code or using the serial monitor.