See also the official documentation:
Help Center > Owners Manual > Using subgroups

The managers of a group may choose to create one or more subgroups in that group, as distinct from creating additional separate groups. With a few exceptions, a subgroup of a group has the same features and controls as any other group, including the primary group.

As of January 15, 2020, groups require premium plan to have subgroups. (Existing Basic groups will be grandfathered in.)

It is those exceptions which matter when considering whether to make a subgroup to an existing group, or a separate group.

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Related Identity

One reason to use subgroups is that their email and web addresses have a common identity with those of the primary group.

Subgroups may be listed on the primary group's home page; each subgroup has a Privacy setting to control this. A link back to the primary group is automatically placed on the subgroups' home pages. Subgroups cannot have subgroups of their own, only the primary group may have subgroups.

The flip side of this, and a reason not to use a subgroup, is that subgroups are not listed in Groups.io's directory of public groups. If the subject of the new group stands on its own it may be better to create a separate group rather than a subgroup.

Subdomain addressing

When a group named "example" has no subgroups, its web address and email posting address are written as:

 https://groups.io/g/example
example@groups.io

When one or more subgroups are created in a group the address format is changed: the primary group name becomes a "subdomain"[1] in the web and email addressing, and the subgroup names take the place of the primary group name:

https://example.groups.io/g/main
https://example.groups.io/g/Sub-A
https://example.groups.io/g/Sub-B

And the corresponding email posting addresses:

main@example.groups.io
Sub-A@example.groups.io
Sub-B@example.groups.io

The default name "main" for the primary group can be changed by the group managers, if they feel there would be a better name to identify the primary group. This field is referred to as an alias for the primary group name.

1: In internet address jargon a prefix such as "example" above is known as a subdomain of the "groups.io" domain.

Legacy addressing

Prior to April 2016, subgroup names were suffixed to the primary group name as follows:

https://groups.io/g/example
https://groups.io/g/example+Sub-A
https://groups.io/g/example+Sub-B

And the corresponding email posting addresses:

example@groups.io
example+Sub-A@groups.io
example+Sub-B@groups.io

For backward compatibility the legacy addresses are accepted when browsing the web or in emails addressed to Groups.io. They are no longer included in outbound email messages nor presented on the web site.

The relevant announcement along with examples can be found in this Update announcement group post.

Related members and management

Another reason to use subgroups is that it can ease the management of group memberships.

The Subgroups page (available to primary group owners and moderators) shows all primary group members, with checkboxes to control their subgroup memberships (add or remove).

Subgroup members must be members of the primary group

People who attempt to join a subgroup, and are not yet members of the primary group, join the primary group instead. Then they may join the subgroup. If either or both the primary group or the subgroup have restricted membership then moderator approval will be required at that step.

If a subscriber leaves or is removed from the primary group, that subscriber is automatically removed from all of the subgroups.

Direct Add

There is a Direct Add feature in subgroups. Unlike Direct Add in the primary group it is available even in Basic ("free") groups, but it applies only to members of the primary group.

Invite

It is possible to invite members to join a subgroup in the same manner as they can be invited to join the parent group. Any member accepting the invite to join a subgroup are automatically added to the parent group.

Open or Restricted subgroup membership

Subgroup membership can be open to primary group members, even when primary group membership is restricted.

Owners and Moderators

The owners of the primary group are automatically owners of all subgroups. This is an important feature for retaining control in groups that allow members to create subgroups.

Moderators of the primary group, if granted the "Manage Subgroups" permission, are automatically moderators of all subgroups.

These "automatic" owners and moderators are not shown in the Members list of the subgroup. If they wish to be visible in the subgroup they may join the subgroup and change their role in the subgroup accordingly.

The primary group owner, mod, or member who creates a subgroup is made an Owner of that subgroup. This ownership is shown in the subgroup's Members list.

Access Controls

The "Create Sub Groups" setting in the primary group's Settings page controls who is allowed to create subgroups. It can be set to "Owners", "Moderators and Owners", or "Subscribers" (all members).

Each subgroup's Privacy setting can make the subgroup's Messages archive visible to subgroup members only, primary and subgroup members only, or to the public.

Examples

Some example use cases for subgroups.

Moderators' group

A common desire is to support better communication among the management of a group. In Y!Groups and other email lists this is sometimes achieved by creating a separate group, whose membership is restricted to just the moderators and owners of the primary group.

This is a natural use case for a subgroup.

PTA group

Primary group is all PTA members, subgroups for board, teachers, school admin, and students.

Product support

Main group for general questions, subgroups dealing with specific topics such as beta testing or off-topic chats.

See also

https://groups.io/g/GroupManagersForum/wiki/Subgroups