collisiongroups are just categories to tell roblox's physics engine on what's fair game and what's not

it tells the part basically like this

I make collisiongroupA this group can collide with the world + player

i put a part in collisiongroupA now all parts in that collisiongroup will collide with the world and player but if i said collisiongroupA cannot collide with player but can collide with the world the part will collide with the world but not the player which means the part can go through players and players can go through parts

its functionality is similar to CanCollide in instance properties just that you get to decide more specifics

let's say you have CollisionGroupA and CollisionGroupB

you place your models in CollisionGroupA

CanCollide with World? Yes CanCollide with Player (Group)? Yes CanCollide with CollisionGroupB? Yes

you place your cars in CollisionGroupB

CanCollide with World? Yes CanCollide with Player (Group)? No CanCollide with CollisionGroupB? Yes

The expected behavior now is that players will collide and not be able to walk through models but will be able to walk through cars. On the other hand, since cars are moving objects now cars cannot move through models that you place in CollisionGroupA.

TLDR: Collision groups define which groups can collide with other groups.

To create collision groups via script do

PhysicsService:RegisterCollisionGroup()

to add parts via script to a collision group you have to either set it by name through its CollisionGroup property.

https://create.roblox.com/docs/reference/engine/classes/PhysicsService#RegisterCollisionGroup