I have a default field named 'Environment' and it is configured so one can enter whatever text they wish. WYSIWYG.
I would like to have the environment field to be a dropdown menu with only the values I wish to show.
Can I do this or must I create a custom field with the same name where the properties are different?
The environment field is a system field (frankly, it's a hangover from Jira 1, it should have been converted to a text custom field years ago as it doesn't do anything clever or necessary), so you can't really get rid of it, all you can do is hide it in the field configurations.
Then, yes, a custom field of (multi?) select list would do the job for you.
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