How is that (displaying a drop down list) even possible?
Those drop down lists in your example are elements of a form:
To create a form in Word that others can fill out, start with a template or document and add content controls. Content controls include things like check boxes, text boxes, date pickers, and drop-down lists. If you’re familiar with databases, these content controls can even be linked to data.
Source: Create forms that users complete or print in Word – Office Support
Posting full instructions would take too much space for an answer, but you can find full tutorials at:
These links should get you started.
