If you want to limit the tags that users can choose from when signing up, you can either use an existing tag set or make one of your own, or a combination. Once you have the tag sets you want to use ready, you can add them to your challenge here.
Note: if you are running a challenge that is specifically for one given fandom or relationship or character, you do NOT need to use tag sets -- just set that kind of tag to 0 tags required/allowed above. Tag options should only be used where you want users to have a choice.
The same group of tag sets is used for both requests and offers, since otherwise offers and requests can't match against each other. (People can choose different tags in their requests and offers, but they have to choose from the same set.)
You do NOT have to specify tags for every kind of tag you have allowed. For instance, you can put in five specific fandoms, and also allow one character tag without putting in tag options. Then the person signing up will have to choose one of the five fandoms, but can just type in a character tag.