It's part of the character creation process. 1 language means 1 spoken language (typically, Common). 2 languages means you can choose your spoken language plus reading and writing in that language. 3 or more languages means you understand additional languages (typically, with 3 languages, you pick your racial language as the third one, and with 4 or more, you pick more non-traditional ones, which could include Allevian, other racial languages, or whatever).
It's based on your intelligence. Here's the chart (from Player's Handbook):
Intelligence
Ability # of Spell Chance to Max. # of Illusion
Score Lang. Level Learn Spell Spells/Level Immunity
1 0* -- -- -- --
2 1 -- -- -- --
3 1 -- -- -- --
4 1 -- -- -- --
5 1 -- -- -- --
6 1 -- -- -- --
7 1 -- -- -- --
8 1 -- -- -- --
9 2 4th 35% 6 --
10 2 5th 40% 7 --
11 2 5th 45% 7 --
12 3 6th 50% 7 --
13 3 6th 55% 9 --
14 4 7th 60% 9 --
15 4 7th 65% 11 --
16 5 8th 70% 11 --
17 6 8th 75% 14 --
18 7 9th 85% 18 --
19 8 9th 95% All 1st-level
20 9 9th 96% All 2nd-level
21 10 9th 97% All 3rd-level
22 11 9th 98% All 4th-level
23 12 9th 99% All 5th-level
24 15 9th 100% All 6th-level
25 20 9th 100% All 7th-level