When you create a form in Form Builder, if you have selection controls (dropdowns, checkboxes, radio buttons, lists, and the like), in most cases you know in advance what choices you want to offer your users. For instance, this is the case if you have a field allowing users to select a state, or marital status, or age bracket.
But in other cases you don't want to hard-code the choices in the form; maybe you don't know ahead of time what the choices are, or they are likely to change, or you don't want to duplicate that list across several forms. In all those cases, you'll want to rely on a list returned by a service (a database query or a REST/web service).
Starting with the upcoming 4.7 release, if your form is available in several languages, you can also define how the labels in those different languages is to be extracted from what is returned by the service. For more on this, see the documentation on internationalization in actions.