Imagine a situation in which all engineers can modify technical notes, but marketing employees can only read them. They cannot modify them. Thus, there are two groups: marketers and engineers, each with different rights in the system.
The group file is also a colon delimited file of multiple lines which looks something like this:
engineers:*:101:selena gunther eric
The fields are:
group name:password:group id:users
So how do you know who you are?