Configuring drop-down (picklist) fields
Tip o’ the day pulled from the Resource Center: Picklists in Microsoft Dynamics CRM can be customized. No, really! That list can be customized to hold any values your organization chooses. The person who adds, deletes, or changes values in a drop-down list must have the system administrator or system customizer security role.
The steps for editing a drop-down list are detailed in article “Configure drop-down (picklist) fields”, at https://rc.crm.dynamics.com/rc/regcont/en_us/op/articles/configurepicklists.aspx.