Player groups are primarily used as a mechanism for groups of up to 6 players to band together to attack npcs that they could not kill alone, or to kill npcs faster than they could on their own. However, they have other functions as well, and can be used for socialising or even idling together.
Players can see what groups are active with the commands 'group list' and can advertise their availability to join a group with the 'group request' command.
Additionally, there are several group specific commands that players have access to when they are in a group.
Group status: This commands update you on the health and status of group members.
Group assist: Allows you to automatically assist another group member when in combat.
Group shields: Shows any arcane protection that group members are currently using.