There are several things it's used for. Most commonly in my experience, it's used to group dates, so you can have your daily data summarized by week, by pay period, by month, year, etc etc and can drill down to see individual days within that group.
Other groupings can be arbitrary.
Say you have 5 people: Person A and Person B are on a team and Person C, Person D and person E are on another team. You can group Person A and Person B into a group and name it "Team 1" and you can then group the others into "Team 2". It will then show Team 1 and Team 2, and you can expand those views to see the individual person's contribution to the team. Play around with them a bit and you'll get the hang of it in no time.