Adding dynamic option fields to joomla extension settings ( Plugin or Module)

When you create a module of plugin for Joomla, you might allow the user to select different options from the administrator panel. These settings mau be simple ones such as selecting Yes or No to indicate the extension is in test mode or not.  You can create those fields in the extensions xml file like below.

But some times its required to select options based on database records,  for example the select a shopper groups from virtuemart component. The way to implement this in extension settings is first to create a param entry in the XML file. 

Then dont forget to change the main params tag like below

elements directory under the extension's directory will contain the definition for the 'myelementtype' field and its content.
and thats it!