diff --git a/doc/hgrc.5.txt b/doc/hgrc.5.txt
--- a/doc/hgrc.5.txt
+++ b/doc/hgrc.5.txt
@@ -15,26 +15,38 @@ aspects of its behaviour.
 FILES
 -----
 
-Mercurial reads configuration data from up to three files, if they
-exist.  The names of these files depend on the system on which
-Mercurial is installed.
+Mercurial reads configuration data from several files, if they exist.
+The names of these files depend on the system on which Mercurial is
+installed.
 
+(Unix)    <install-root>/etc/mercurial/hgrc.d/*.rc::
+(Unix)    <install-root>/etc/mercurial/hgrc::
+    Per-installation configuration files, searched for in the
+    directory where Mercurial is installed.  For example, if installed
+    in /shared/tools, Mercurial will look in
+    /shared/tools/etc/mercurial/hgrc.  Options in these files apply to
+    all Mercurial commands executed by any user in any directory.
+
+(Unix)    /etc/mercurial/hgrc.d/*.rc::
 (Unix)    /etc/mercurial/hgrc::
 (Windows) C:\Mercurial\Mercurial.ini::
-    Options in this global configuration file apply to all Mercurial
-    commands executed by any user in any directory.
+    Per-system configuration files, for the system on which Mercurial
+    is running.  Options in these files apply to all Mercurial
+    commands executed by any user in any directory.  Options in these
+    files override per-installation options.
 
 (Unix)    $HOME/.hgrc::
 (Windows) C:\Documents and Settings\USERNAME\Mercurial.ini
-    Per-user configuration options that apply to all Mercurial commands,
-    no matter from which directory they are run.  Values in this file
-    override global settings.
+    Per-user configuration file, for the user running Mercurial.
+    Options in this file apply to all Mercurial commands executed by
+    any user in any directory.  Options in this file override
+    per-installation and per-system options.
 
 (Unix, Windows) <repo>/.hg/hgrc::
     Per-repository configuration options that only apply in a
     particular repository.  This file is not version-controlled, and
-    will not get transferred during a "clone" operation.  Values in
-    this file override global and per-user settings.
+    will not get transferred during a "clone" operation.  Options in
+    this file override options in all other configuration files.
 
 SYNTAX
 ------