What does “Address Book Source,” in the tools menu, do?

In writer, what does “Address Book Source,” in the tools menu, do?

I send plenty of letters. Would it be possible to create a template where I click on a field, and then I would be presented with the list of address of the people I want to send the letter to?

Can this be done with “Address Book Source” do?

Thanks.

Thank you for the answer.
I get that it creates an address database, but what will you do with it after? How can I use the Address Book? I tried to search tutorials with what you do after registering an address book, but I could not find any. Could you please point me to the right direction? Could I use the address book for my needs, which to give me with a list of addresses?