Disable password complexity on Windows 2012 R2

You're looking to change the password complexity setting you found in the "Default Domain Policy", not the local group policy. Then do a "gpupdate" and you'll see the change take effect.

Open Group Policy Management Console (Start / Run / GPMC.MSC), open the Domain, and right-click and Edit the "Default Domain Policy". Then dig into the "Computer Configuration", "Windows Settings", "Security Settings", "Account Policies", and modify the password complexity requirements setting.

Editing the "Default Domain Policy" is definitely a quick-and-dirty thing to do. The better thing to do, once you get a better handle on group policy management, would be to return the default back to default settings and make a new GPO overriding the default with the settings you want. To get you by fast, though, editing the default isn't going to hurt you.

Your member computer is picking up its local password policy settings from the "Default Domain Policy" (in a stock configuration) but you can override it by applying a group policy object with the password policy settings you'd like at the OU of that machine (or, really, anywhere lower than the top of the domain but above that computer object's path).

As long as you don't put another password policy into a GPO at the root of the domain you won't cause changes to the domain-wide password policy (used for AD accounts by domain controllers).

You might see things about granular password policies in W2K8, but this isn't what you're looking for. What you want can be done in every version of AD back to W2K, because it only applies to local accounts on member computers.