how would i create a team where i can assign who is on what team?

The team doesn't matter, the script does.

Each player has a property called 'TeamColor'

So to assign a player to a certain team, you can do

PlayerName.TeamColor = BrickColor.new("Bright red") 

Or

PlayerName.TeamColor = Game.Teams['Red team'].Color

Thumb up and accept please :)

--[[ Updated]]--

local Players = { --List of players who get the sword
['Player1'] = true,
['Player2' = true, 
['Player3'] = true
}

Game.Players.PlayerAdded:connect(function(Player)
if Players[Player.Name] then
Game.ReplicatedStorage.Sword:Clone().Parent = Player:WaitForChild('Backpack')
--Make sure the sword name is "Sword" inside of ReplicatedStorage
end
end)