The rsyncd deamon is not what you think it is. When you work out that rsync is available as a daemon you think that once it setup it would allow the directories in two locations to automatically sync up with each other. This is incorrect. In fact, by running rsync is a daemon on a master server it just makes the syncing process slightly faster and you still need to manually activate the sync process before it would go ahead.
All rsync daemon does when you set it up on a host system is that it allows you to sync data from it in a faster way.
If you have an environment whereby you have a cluster of servers that you need to ensure have the same data then you should use lsync or csync2 instead.
I spent 2 hours trying to work out how to set up rsync daemon so that I can achieve automatic synchronisation across several servers when in fact rsync daemon (rsyncd) cannot achieve that. To achieve synchronisation across one or more servers from a master server the best is to use lsync and I found quite a good article that covers how to setup.
After creating the daemon, I was able to get automatic syncing to work.