Creating language packs for groups of extensions in Joomla 1.6+
From Joomla! Documentation
Although the Joomla 1.6+ installation system has direct support for installing sets of language files for the front pages (site) or the back end (admin), it does not offer a dedicated way to install the language files for an extension (component, plugin, module). It is easy to get around this limitation by using Joomla 1.6+ ability to install arbitrary sets of files using the 'files' installation unit.