A group is a set of users to which you can assign a privilege, thus assigning that privilege to all the users that belong to that group. This provides a manageable way of granting and denying privileges. For example, you could create a group called DEVELOPMENT, and assign users USER1, USER2, and USER3 to that group. You could then grant to that group the privileges to create, browse, and update items, thus giving these abilities to USER1, USER2, and USER3.
The ADMIN Group
When you first install Dimensions CM, there is a group called ADMIN already defined. This group is set up for administration purposes and has the necessary privileges granted to perform tasks such as creating users and granting privileges to them, and so on.