A Group is a profile that needs not be a valid server user profile.
Creating a Group minimizes the task of setting authorities provided there are a several users who have the same privileges. You create a Group and set the authorities at the Group level. When you assign a User to that Group it will automatically adopt the Group's authority to an object.
Here, a user profile Frank belongs to the Group profile Business.
This Group profile is only authorized to use the Business Applications.
If you look at Frank's authorities now they would look something like this:
Users are authorized to anything they are individually authorized to as well as anything that any group they belong to is authorized to.
Notice how the checkboxes next to those Framework objects the Group is not authorized to are enabled. The user – Frank – could be granted authority to use those objects.
That's because group authorities are additive: a user can gain authorities by being a member of a group, but cannot lose any authorities.