I had to disable new registrations due to a flood of spammer accounts (see “Spam strategies?” thread).
Under Administration > Site Settings, I’ve set the “Allow invitations by” flag to “User”.
But what does this actually do? How can my users invite their friends to join? (Presumably, they are not friends with spammers.)
I could not find this in the UI or documentation. Thanks! 
You’ll find “Invite users” in the same menu as Preferences, Development, Moderation, etc. People can create invite links with various params such as number of uses or expiration time.
Can you please update this for June 2019? What/where are the settings to turn on invitation only? How does this change the main page? Do I have to also set registration approval, or is that separate?
In March 2021 (I’m running Mastodon v3.1.3), this item is in the Moderation > Invites menu item. Or at the URL https://your.mastodon.blah/admin/invites.