Can we create a Index life cycle policy with Hot, Warm and Cold phase in a two node cluster(1 data node, 1 master)?

Can we create an Index life cycle policy with Hot, Warm, and Cold phases in a two-node cluster(1 data node, 1 master)?
what can be the architecture of policy and what configurations are required for both Elastic nodes?

You can. but two of the phases will need to exist on the same node.

Do you mean this => If I want to keep phases on the data node, I should keep both phases on the data node itself?

If your master node doesn't store data, which doesn't make sense for this size cluster, then all phases will be on the data node.

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The main purpose of different phases is to alter location or settings for indices over the lifetime. This allows older indices that are not indexed into and possibly less frequently queried to be hosted more densely on nodes with a different hardware profile. If you only have one data node this is not applicable and the only thing you can change are settings, which tend to have less effect.

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