A target definition specifies all aspects of a target - including its location, constituent plug-ins and environment.
The New Target Definition wizard is available under
File > New > Other... > Plug-in Development > Target Definition
from the top level menu.
The only restriction is that the target definition must have a .target file extension. The target definition can be placed in any project and any folder. The flexibility in naming the file allows you to store multiple target definitions in the same folder.
A target definition can be initialized in one of four ways:
Window > Preferences... > Plug-in Development > Target Platform preference page.