The indentation of every line in this file determines the structure of the tree menu, i.e. how often you have to click (+) to find the entry. Look at this example:
Group 1
Subgroup 1
ID Field 1
ID Field 2
ID Field 3
Group 2
Subgroup 2
Sub-subgroup 1
ID Field 4
This may be transformed then as shown here:
The leading number is always the ID, to let the editor know what
to insert - the editor can't work with just names! 
A list of all ID numbers can be found here
(sorry it's in German though).
Example: In the picture below the entry for the Monument was added. Left the file Descriptions.txt, right the resulting Tile Editor menu:
