A group menu (or better group-submenu) is a submenu which is diretly shown. This means you can group menu-items of different levels in one submenu. To see a group-menu in action just hover "Joomla-Views" in the menu on this page.

In the submenu you can see items of level 2 (for example "Article Views") grouped together with items of level 3 (for example "Single Article"). Using this group function you can present lots of menu-items to your visitor in an clearly arranged menu.

Of course you can also set how many columns or what width your submenus should have.