To create a new calendar (or edit an existing calendar), click on "Edit Calendars" in the Event screen's toolbar. Creating different calendars allows you to categorize your events. For example, you can assign all "Youth Events" to one calendar, and those events will be displayed on the Calendar Screen in the color you selected for that calendar. You can create multiple calendars, like a church calendar, a pastor's appointment calendar, or calendars for specific ministries. The permission level options control which calendars each user level is allowed to view or edit.
When creating a calendar, you have the option to choose between creating a Database Calendar (default), or a Google Calendar. A Google calendar is essentially a read-only feed from your Google calendar that is displayed in CTO. Events on Google calendars cannot be edited in CTO, nor are advanced options, like Volunteer and Event Management available for Google calendars. Displaying a read-only Google calendar in CTO may be helpful in some instances, but for most uses we recommend creating a Database calendar. There's more information on creating and configuring a Google Calendar here.