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When building your form, dropdowns are a great way to give users limitations on what choices they have.
When you add a dropdown, you will get an option to either chose from an existing dropdown you created earlier, or create a new one. Existing dropdown lists can be managed from the Masters Tab by clicking on Lists.
If you chose Create a New Dropdown, a new dialog box will show up. First, give your Dropdown a name in case you want to use it later.
Then, you can add as many options as you want. Hit Enter after every option. You can also reorganize the option if you want, or add a default value.
After you are done, save the field.