To use picklist fields inside lightning flows,we need to have the picklist values available.

For this, we need to create a picklist choice set from resources section in flows.

Then, we can use those picklist choice set inside Screen Flows and map with picklist fields.

If you want to know the detailed explaination along with examples and demo for creating picklist choice set in Lightning Flows in Salesforce, please check below video:

If you have any questions related to this topic, please add them in comments section of the video.