CellGrouping is an option for Notebook which specifies how cells in the notebook should be assembled into groups.
The default setting is typically CellGrouping->Automatic.
With CellGrouping->Automatic, cells are automatically grouped in a hierarchical way based on their styles.
With CellGrouping->Manual, cells must be grouped manually, either by setting up explicit CellGroupData expressions, or by using the Group Cells menu item in the notebook front end.
See The Mathematica Book: Section 2.10.2 and Section 2.10.13.
See also: CellGroupData.