Mode selection is a term used when you are able to choose your transmissions formation.
4x4 vehicles are made so that you are able to switch from 4x4 to 4x2 in instances where you are driving on normal conditions and would like to save on fuel consumption. You may also have the option where you are choose from 4x4 low or 4x4 high, these two differentiate with the amount of torque provided to your wheels.
I hope I helped...Jin