We have a guide coming out for translation pack creation, but to answer your question:
Translation packs are installed as folders inside the translations/ directory next to the game (the application file, so the .exe on windows)
So for someone with a Spanish and Italian translation pack, it might look like this:
- TalesOfAndrogyny.exe
- translations
- es
- manifest.json
- assets
- ita
- manifest.json
- assets
- es
The manifest.json in es would contain
{ "languageName": "Español" }
and that would tell the game to add an Español option in the language dropdown.