To the uninitiated (and sometimes even to the initiated), Microsoft 365 Groups are perhaps one of the most confusing parts of Microsoft 365.
You're probably best to think of a Group as simply users who have common access to a set of things in 365.
What, like a Security Group? Well, not exactly - because when you create a Security Group in 365, you give it a name, and you add some users, and that's about all that happens.
When you create a Microsoft 365 Group, you give it a name, and you add some users, sure - but then, various things get created for that Group.
The confusion starts here.....
The things that get created will depend on how/where the Microsoft 365 Group was created.
If you use Yammer, and you create a Group there, it will create:
A Yammer Feed for the Group
A SharePoint Online site (for file storage)
Or, you can create a Group from Outlook - if you do that, these get created:
An Outlook Email Inbox (with its own email address)
An Outlook Shared Calendar
A SharePoint Online site
A OneNote Notebook
A Planner Plan
Or (because 365 is all about giving you choice), you can create a new:
Planner Plan - which actually first creates a Group, then a Plan, an Inbox, a Calendar, a SharePoint site, etc.
Team - which first creates a Group, then a Team, an Inbox, a Calendar, a SharePoint site, etc.
Ultimately, you can use some / any / all of these things to get work done - but at a basic level, that Group is some people with something in common - people in a department, like Finance; people working on a specific Project; people involved in a social thing, like a company sports team.
Most people are going to have a preferred way of working - and in broad terms, Groups align like this:
Yammer for discussion-centric working (less real time than Teams)
Outlook for email-centric working
Teams for chat-centric working (more real time than Yammer)
Further information, along with a really good graphic showing how all these products hang together in the context of Groups can be found here: