A film territory is the region (often a country) a film release is intended to be shown in. That release may have changes to cater to that region, such as censor rating.
If you enable the Head Office system setting EnableFilmTerritory, you need to assign a film territory to each of your film records. We recommend leaving this setting disabled if your circuit operates in one film territory. You won't receive much benefit from enabling film territories.
If your circuit operates across multiple territories however, we recommend reading about how enabling film territories changes Vista software. For these circuits, enabling film territories can simplify operations such as film scheduling.