Neither, really. Or at least not entirely.
Each region has someone tasked with leading it and identifying potential YNT candidates. They will go to a lot of games, watch a lot of film, will review things like INSTAT scores, if available (although INSTAT is ridiculously unreliable and punishes certain positions, generally the cream does seem to rise to the top), and will rely on a network of scouts within their region to recommend players for review. Many of those scouts will indeed be youth coaches in various leagues.
If a player performs well enough or is recommended highly enough by enough scouts, they will typically be invited to a regional ID camp.
For those that are deemed as deserving (or just played really well when the right people are watching), they will then be invited to a national YNT camp for further evaluation.
From those camps, the YNT is formed for specific events.