Config values can be set in three ways:

1. Via private static variables on any class within a SilverStripe project
2. Via yaml config files (stored in module-folder/_config/[file].yml)
3. Via PHP at run time (Config::inst()->update('Director', 'environment_type', 'dev')

Generally it's best to set config values via the first 2 methods as these are statically cached when flushing the cache.

Setting with private statics

class MyDataObject extends DataObject {

    private static $db = array(
        'Title' => 'Varchar',
    );

}

All private static class variables in a SilverStripe project's code (including modules, but not packages in the vendor/ directory) will be loaded into the Config.

Setting with YAML

You can add this to mysite/_config/config.yml (or any other YAML file in that path).

Director:
  environment_type: dev

Using YAML files is a great way to override default Config values for core classes or modules

Setting at runtime

This would typically be done in mysite/_config.php

Config::inst()->update('Director', 'environment_type', 'dev');

Updating the Config in PHP should be avoided where possible as it's slower than using the cached values