The Grouping Form and the Grouping Options sub-form allow you to select Fields to group on. This is done by moving the relevant Field to the right hand side report template using the arrow buttons.
Sometimes you will find that the Attribute Set will already be set up as a heading. This will have occurred if you did not select an Attribute Set in step 2 and you have selected one or more user fields to be included in your report. In this case, the report will be grouped on the Attribute Set first followed by your other group selections. The wizard will then insert the appropriate heading for your user fields onto your report.
The Groups that you select will be shown in red causing all records with the same entry in this field to be listed together.
If you select a Code field to Group by (i.e. Type code, Family code, etc) then the Group description will display on the resulting Report as well.
Grouping Form (more details)
Grouping Options (more details)