Organic Groups lets you create sections of a site to organize users and content with common interests. The term "organic" refers to the way group creation can be placed in the hands of all site users, not just administrators.
The basic components of a group are shown in the diagram below.
A group type is often based on a new content type but other entity types (e.g. taxonomy terms) can also be used to define a group type.
A group comprises one or more users. The user that creates the group becomes the administrator by default but the group creator can grant the group administrator role to other group members.
Once the group has been created, content can be associated with the group. Group content is often based on existing or specially created content types but, like groups, group content can be based on other entities e.g. products.
Organic groups, their user members and the content within them are all part of the same site and share the same database and file system.
The module is extremely flexible and can handle a wide variety of organizational requirements.