User Groups allow Virtual Private Server user accounts to share files with one another. This is particularly useful for situations such as multiple webmasters maintaining a single Web site. Groups are also used to give users access to specific programs. A user with FTP privileges, for example, must be a member of the ftp group.
Any user has a primary group which they belong to, and they can also be in other groups. In the /etc/passwd file, the GID (Group ID) is the second number. This is the user's primary group, and any files created by the user will belong to this group by default. The /etc/groups file stores a list of all the groups, their GID, and the members of the group.
Because each file and directory in UNIX has specific file permissions, it is important with groups to make sure you set the group file permissions appropriately. For more information on changing file permissions, see a UNIX manual or see the man page for chmod. A user can change which group owns his files by using the chgrp command.
The wheel group (GID 0) is a special group. Any user in the wheel group can use the su command to become the root user. For security reasons, you should be careful about who you put in this group.
There are a number of other groups that exist to give users access to specific programs. Some specific instances of this that you should know about are the ftp, pop, imap, and web groups, which require a user to be a member of the group to have access to that program. There are also groups that exist for system uses only. If you are uncertain of the purpose of a group, it is a good idea not to delete or add users to that group.