User Groups can be used to group users in to logical groupings. The purpose of the group is to help administrate many users at the same time. The groups can be used for handle permission sets, user profiles etc. A user can belong to several User Groups at the same time.
All operations done on a user group are performed directly on each user that belongs to the group. It is not applied to a user added to the group later. In the same way the effect is not removed if you remove the user from the user group.
Note: These User Groups should not be confused with Finance User Groups. These are defined in Business Roles/Accounting Rules.