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In this video tutorial by John on Excel Campus, he explains how to create dynamic data validation lists that automatically include new items from a source range. The process involves using Excel tables and named ranges. First, users should navigate to the products sheet and insert a table by selecting the “Insert” tab and using the keyboard shortcut Ctrl + T. It's important to ensure the "My table has headers" checkbox is checked before clicking OK to create the table. The tutorial emphasizes the ease of expanding the data validation list as new items are added to the source range through this method. Additional resources on starting with Excel tables are also mentioned.