I think you we are suppsoed to do localisation with a .lua file containg the strings in table format and use this entry in manifest to switch based on client language: http://wiki.esoui.com/Addon_manifest_%28.txt%29_format
localization/$(language).lua
Three are supported English, French or German by ZOS.
There is a cVar to detect language. It is "Language.2" and the return is two character string , "en", "fr', or "de".
Using the manifest you can have the game load a different file(s) based on the language the client is playing in. Typically, the lua file is string tables but you could do more.
The variable $(language) become the two character return of the cVar. If the player is launching in German and the manifest entry localization/$(language).lua, the game loads the file de.lua in the subdirectory localization.
-halja