In Excel the feature lives under Data, Data Validation, where the Allow box sets the kind of entry permitted: whole number, decimal, list, date, time, text length or a custom formula. Two further tabs shape the experience. An input message appears when someone selects the cell and explains what belongs there, and an error alert decides what happens when the entry breaks the rule, in one of three styles: Stop refuses the entry, Warning lets the user overrule it, and Information simply reports it. Google Sheets reaches the same place through Data, Data validation, Add rule, and adds a choice between a list typed into the rule and a list read from a range, plus an option to allow several selections in one cell.
Drop-downs and consistent data
The most common use by far is the drop-down. A column of regions, cost centres or statuses stays consistent because nobody types them; they pick. That consistency is what later lets a pivot table group the rows correctly and what keeps a lookup from failing on a trailing space. When the list sits in a range elsewhere on the sheet, the rule should point at it with an absolute cell reference or a named range, so that copying the rule does not drag its source out of place.
Where the rule stops helping
A rule checks an entry at the moment of typing, and only then. Values already in the cells before the rule existed are untouched, and anything pasted or filled in later slips past without a prompt, which is why Excel has a Circle Invalid Data command to highlight offenders after the fact. The rule is also only as firm as its alert style; a Warning is advice the user may decline. Treat it as a guard rail for people filling in a shared sheet, which is most of the spreadsheets topic, and pair it with co-authoring etiquette: one owner for the rules, everyone else filling in.