This refers to drivers with licenses from other states, not foreign governments. Drivers with licenses from other states can drive in California without a California license, as long as they are licensed in that state. All states require residency to obtain driver's license so the part about requiring residency is redundant.
__________________
I am not an immigration attorney nor do I have any experience litigating immigration cases. As always, seek professional advice before pursuing any course of action. I cannot be held accountable for any consequences of my comments.