What is a grouping product for?
It gathers simple products into a set, that has one (or a few) common features. For example, you run a store with leather accessories, and would like to create a set for few products, such as a wallet, suitcase and a belt, and make it visible under one listing in your store search, and manage it with a certain set of attributes & categories.
How to create it?
You just go to Product >> Catalog and Create New Product. You'll see a pop-up with few inputs to be filled.
After you fill in the form, click "Create & Edit" to view more advanced options, such as: - template - group - history - comments - collections
Let's focus here on the tab called "Group" - it's the place where you can create a set from other simple products.
As you see, you can add, edit and remove particular products that are in the set that you're creating. If you decide to change the set, you can just attach or detach the products as you wish and always keep them in here.