If you want a cascaded lookup to give the user only choices in a dropdown that apply for a choice earlier made, you can configure that in your form.
In this example we want to filter regions based on a pull down menu from a list of countries. Therefor we have two lists in the background; a list with countries, and a list with Regions, that has a lookup to the list with counties, like this:
You can configure a cascaded lookup by using the filter in the lookup field configuration panel:
Using the Query editor you can create the cascaded lookup:
Now the result is that if you select a country, only the regions for that country are visible:
In this video you can see how cascaded lookups can also be used to filter lists with over 5000 items: