Q.What is the difference between categories and groups?
Categories and groups are both systems for indexing items, but they have a number of differences.
Categories are the primary way of classifying items. Every item in your store must belong to one (and only one) category or subcategory. Although you are free to create whatever categories you wish, most store owners put items into categories based on what the items are: e.g. tables would go in the Tables category, chairs go in the Chairs category, and so on. Disabling a category hides all items in the category.
Subcategories are a way to further specify items within a category. For example, if you have a Tops category, you can put items within that category into subcategories like T-Shirts, Dress Shirts, and Blouses. It is possible to view all items in the category, including subcategories within the category, by viewing the main category page.
Groups, in contrast to categories, are optional, and each item can be added to up to 30 groups. Groups can be used to sort items by such things as attributes and price range, or items on sale. Disabling a group just hides that group, with all items in it remaining visible on the store.
Metagroups are a way of classifying groups. An example of this is if you put items into groups by color: you can make a metagroup named Color and add the groups for each color. This enables you to add the Color metagroup to your menus or front page and let your customers sort items by color. In this case, it is not possible to view all items in the metagroup.