Allocation list is for select USMNT senior and youth players and for players returning to the league.
Then there is a "discovery" list - every year, you have a list of players who don't play in MLS who you get to claim. I want to say it's about 10 names globally each franchise can claim. If that players wants to play for another franchise upon entering the league, then the team with a claim is compensated. I've read on here it costs $50k to buy someone else's claim.
For a long time, it's been rumored that Pirlo and Gerrard were both claimed by LA Galaxy. Who knows if that is true.