You need admin access to edit MediaWiki:Licenses.
Here's how to use it... using Community Central's page as an example.
First couple of lines can be used to explain how it works:
* Own photo: ** Self|I created this image myself
In this case, * Own photo: would show up as the grayed out heading in the dropdown menu.
** Self|I created this image myself represents the license template name ({{Self}}) and the description ('I created this image myself') separated by a vertical bar (|).
So, if you wanted to add another item under the header, you might add something like this:
** Selfie|I created this image myself of myself (I'm self-centered like that)
Now you'd need to make a new license template {{Selfie}} that would get inserted in the image file description when you selected 'I created this image myself of myself (I'm self-centered like that)'.
I hope that is easy enough to understand.