Legal values for the operating system, platform, bug priority and severity, and custom fields of type Drop Down and Multiple-Selection Box (see Custom Fields), as well as the list of valid bug statuses and resolutions, can be customized from the same interface. You can add, edit, disable, and remove the values that can be used with these fields.
Editing legal values requires admin privileges. Select "Field Values" from the Administration page. A list of all fields, both system and Custom, for which legal values can be edited appears. Click a field name to edit its legal values.
There is no limit to how many values a field can have, but each value must be unique to that field. The sortkey is important to display these values in the desired order.
When the availability of the values of a custom field is controlled by another field, you can select from here which value of the other field must be set for the value of the custom field to appear.
Legal values from Custom Fields can be deleted, but only if the following two conditions are respected:
If any of these conditions is not respected, the value cannot be deleted. The only way to delete these values is to reassign bugs to another value and to set another value as default for the field.
This documentation undoubtedly has bugs; if you find some, please file them here.