If your association has Chapters, they are defined in a flat table in the Members Dictionary. Examples for an international scope are in the next screen shot. 
You can have as many MasterCodes as you need to define your chapters, which populate the Chapter field drop down menu when you add or edit a Member folder in the AMS. If your association allows a single member to belong to multiple chapters then you will typically use separate Chapter folders in addition to a Member folder. In those cases this dictionary will appear in the Chapter folder as well.