Picklist in Formulas
A picklist field lets you choose a value from a pre-populated list. While you can’t write a formula that returns a picklist as a result, you likely have to reference picklists in your formula fields.
Say you need a validation rule that requires a user to fill out an explanation if they select “Other” as an Account’s Type. This validation rule formula requires that a user fill out the text field Other Type if they set the account’s Type as “Other.”
ISPICKVAL(Type, “Other”) &&
If a user leaves Other_Type__c blank when Type is set to “Other,” the validation rule fires, and the user can’t save the form.
This blog is very useful to learn about how to use picklist type in formulas.