Picklist or lookup

When creating new attributes for an entity the obvious data type is a picklist - especially when there are only a few valid choices such as Title (Mr, Mrs etc).

However, picklists are not without some problems and in some situations it may be better to create a new entity and a 1:n relationship between the main entity and the new entity.

The table compares picklists and using entities.

Picklist Lookup Entity
Easy for user to select value More clicks than picklist to select the value
Can't be reused between entities Can be used on more than entity (create additional relationships)
Can't be set using a dynamic value in Workflow Easier for users to maintain (just add/update/delete records)