Groups are a collection of items, usually related to a specific area of interest. If you have the privilege, you can create groups as a way to organize their items. As a group owner, you decide who can find the group, if others can request to join, and who can contribute content. You also have control over items shared to the group and can invite others to join, even if your group doesn't accept membership requests.
Groups that allow others to join the group and contribute items are a useful way to collaborate. For example, you might be a biologist working on an international bird habitat map template. You might search for groups whose members are sharing local bird habitat data that you could use. You could join the group and share your template. Together, your group could create a standardized international habitat map with rich local data layers.
Groups are also a way to organize high-profile content. Administrators use groups to feature content on the home page and gallery and build custom galleries for basemaps and app templates.