The mods are packed in some kind of an archive, like rar or zip. Extract all files from it into your \mods\ folder. It's on your main Dominions 3 directory, just like your \maps\ folder.
Put the mod in the mods folder, and then enable it from Preferences -> Mod preferences.
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Great indebtedness does not make men grateful, but vengeful; and if a little charity is not forgotten, it turns into a gnawing worm.