where is PHP code interpreted?
It depends on how you have PHP set up. PHP will function as a webserver SAPI module, an executable CGI binary, or a standalone executable.
typically, server-side as a webserver module. What's the context?
I'm sorry, I may be missing something, but your question seems very vague. I hope this is the answer you are looking for:
PHP code is most commonly interpreted on a web server, but it can be used to write desktop applications and interpreted there.