If I write the following code:

Function BaseKeys(actor akTarget)   OMZkey = 50   OMZform = akTarget.GetRace() as form   If (RacesBeast.HasForm(OMZform) == True)      OMZkey += 10 * playerREF.GetRelationshipRank(akTarget)   endIf   OMZstage = 7endFunction

I use a formlist that is defined in the creation kit "RacesBeast" but even though it is defined in the creation kit, I still need to declare it as if it is a new formlists that papyrus knows nothing about. (Please correct me if that is not true)

Now that I have declared it, does papyrus see the elements of the formlist in the creation kit (KhajiitRace and ArgonianRace) or do I need to define those as well and tell papyrus that they are in the RacesBeast formlist?

Post your whole script.

When you say you "declared" your formlist, do you mean to say you made a property (and filled that property in the CK). You do need to make a property to the formlist in order to use it. You do not have to make race properties for the HasForm to work. Here are a couple examples below...

This code works fine and compiles.

Formlist Property RacesBeast AutoFunction SomeFunction(Actor akTarget)    Race kTargetRace = akTarget.GetRace()    if RacesBeast.HasForm(kTargetRace)        ;do stuff    endIfendFunction

This code does not work. Although the Argonian race is in the formlist, papyrus cannot see it.

Formlist Property RacesBeast AutoFunction SomeFunction(Actor akTarget)    Race kTargetRace = akTarget.GetRace()    if kTargetRace == ArgonianRace ;does NOT work - argonian race undefined        ;do stuff    endIfendFunction

This code works because we used the GetAt function and the respective index to get the Argonian race

Formlist Property RacesBeast AutoFunction SomeFunction(Actor akTarget)    Race kTargetRace = akTarget.GetRace()    Race ArgonianRace = RacesBeast.GetAt(0) as Race    if kTargetRace == ArgonianRace        ;do stuff    endIfendFunction

Hope that clears some stuff up. But again, posting your whole script rather than a fragment is very useful

Also, you can name your properties and variables anything you'd like - they don't have to match the CK name. The only advantage of using the exact CK name for properties is that you can auto-fill them.