The Rancher server is made up of the API Server, an Authentication proxy, and one cluster controller for each cluster that Rancher manages. Rancher uses etcd for its data store, and when deployed into a highly available Kubernetes cluster, it utilizes the cluster's etcd installation to also become HA.
The Rancher management cluster is an RKE cluster dedicated to running the Rancher management components.
Downstream clusters managed by Rancher run a Cluster Agent that bridges between the Cluster Controller and the Kubernetes API server that runs inside the cluster, and they run a Node Agent on every node in the cluster to handle node-specific activities.
Rancher Architecture : https://rancher.com/docs/rancher/v2.x/en/overview/architecture/