This functionality provides the ability to create a new collection within the selected database. Next to the name you can also specify advanced settings. If the GridsFS collection option is enabled, the collection will extended with ".files" on the entered name and an associated chunks collection will be created when saving.
The remaining options are explained here: http://docs.mongodb.org/manual/reference/method/db.createCollection/
For this functionality is important to note that the naming conventions for MongoDB collections are complied with and the new name does not already exist in the database.