A class can be marked by the "private" access specifier only
if its a nested member of another class.

Top level classes cannot be marked as "private". Hence you
can have private classes in a java file but they must be
nested inside another class.

yes we can declare private class in java file

•Only nested classes can be private. If a top-level class 
were private, nothing could access it.

So, private nested classes are just like other private 
members (methods and variables)--they can only be 
accessed "within the body of the top level class  that 
encloses the declaration of the member or constructor" 

Private classes are to be used only by their declaring 
class (more or less) just like other private members

No for the outer class and we can declare it for the inner 
class.