Yes it can be edited. It's located under Data/English/Scenarios in your GalCiv2 folder. I'd suggest making a copy of the file and editing the copy. Open it with notepad and at the top of the file you'll see this:

[INFO]
Description=Start with all the technologies. Who is the ultimate power?
Title=Battle of the Gods
Image=
Victory=Your greatness exceeds all others.
Defeat=The mythology of your civilization will fade into legends of a demonic force long since vanquished.
PlayerRace=0
Conversation=
IntroScenePath=
VictoryScenePath=
[TEAM]
Human=0
Name1=
Drengin=0
Name2=
Altarian=0
Name3=
Arcean=0
Name4=
Torian=0
Name5=
Yor=0
Name6=
Korx=0
Name7=
Drath=0
Name8=
Thalan=0
Name9=
Iconian=0
Name10=
Custom=0
Name11=
Dreadlords=0
Name12=
[ACTIVE]
Human=1
Drengin=1
Altarian=1
Arcean=1
Torian=1
Yor=1
Korx=1
Drath=1
Thalan=0
Iconian=1
Custom=0
Dreadlords=0

If you want to use a race other than Humans then change player race to a different number (hint, they're in order ie. the Yor are race number 5)
If you'd like fewer races then change the number under active races from 1 to 0 for each one you'd like to get rid of, or vice versa if you'd like more races.

Pretty simple really.