The account type is important because you can use it to add filters when viewing Accounts.
When setting-up the account for the first time you will see this field on the "Basic Tab".
Click on the drop down and select the appropriate type.
a) Normal – normal business requirements or rules apply, this can be defined internally by your company
b) Strategic – special partnerships or business rules apply, this can be defined internally by your company
c) Archived – label for accounts that are retired without necessarily deleting from the system
The Account Type can be edited anytime.