Well, there are 2 different kind of checklists, I’m not sure what type you are asking about. So I will cover both.
there are personal lists. Each user has an automatically created list called their life list. In addition you can create other personal lists. These lists are populated with species you have reported on the site, or you can manually add them if you have not submtted something but have seen it and want to use the functionality to document your life list.
A word of warning the code that manages these is really old, and does not seem to do a great job keeping them in synch.
Additionally there are place checklists. Every place added to iNat asuming it is enabled for that place has a checklist. Like personal lists these are automatically updated as new submissions come in. Additionally species that are known (or even suspected) to be found in that location can be added.manually. Effectively they are inventories of the species that can be found in that location.
Here is an example of a really well put together checklist that has both the records from site observations as well as manually added stuff. Any user that wishes to do so can add new species to a place checklist.
Place checklists are also used to record the occurence frequency and establishment (native vs introduced) state of the species in that location. They also have very good filtering tools to find species that meet different criteria in that place.