You only have to replace the value for the tags that end with "P", these are the UI display values the player sees.
If you change the others, it will break the database skills that use those for racial damage and defense bonus, so don't do that.
I would do this:
tagRace02=Animal
tagRace02P=Humans
as an example.
I update this topic even if it's old because I think this doesn't work.
If you don't change the singular name of the race, the text under the monster name will be wrong.
The plural is used in skills or items (like +X% damage to tagRaceXXP) and the singular is used in the blue text under the monster name. Translations change both singular and plural for that matter.
I suppose there is a link between tagRace and the name used in the characteracialProfile line that is hardcoded. So you should update the text file singular and plural, but have to use the original names ("Animal", etc.) in your monster files for the characteracialProfile, and for racial damage and defense bonuses, write the original racial names as well, no matter what you put in the Modstrings.txt. I will test that, but any confirmation is welcomed.
The fact that this list is hardcoded makes it impossible for modders to increase the number of races.