Groups are of various types. One major categorization is of formal and informal groups.

Groups that are established for a specific purpose are called formal groups. This type of group is usually formed to meet clearly defined goals. The examples of formal groups include student projects groups, committees, boards or commissions.

Informal groups form naturally out of interaction among individuals overtime. Informal groups may emerge out of formal groups with members having similar ideas, values, beliefs and social needs. For instance, Indian National Congress, Rotary Club started as small informal groups but with time became formal groups. Spontaneous interaction of like-minded people aimed towards achieving a common goal may give rise to the formation of informal groups.

Membership of any group depends on many things. Some of the important factors include importance, common motive, socio-economic background, cultural aspiration, poverty, deprivation, and job security. Attitude similarity and external factors of situation and leadership characteristics also play an important role in the formation of groups.