Layer Groups are an excellent way to organize a complex multi layered document. To create an empty Layer Group, click the Create Layer Group (the folder) icon at the bottom of the Layers panel. The Group will be added above the currently targeted layer. If no layers are targeted, Photoshop adds the group to the top of the layer stack.
To create a new Layer Group while simultaneously placing targeted layers into that group Group select Layer > Group Layers or drag the targeted layers (in the Layers panel) to the New Group icon at the bottom of the Layers panel, or use the keyboard shortcut Command (Mac) / Control (Win) + G. The group will be added above the topmost currently targeted layer.
To ungroup layers select Layer > Ungroup Layers or use the keyboard shortcut Command + Shift + G (Mac) | Control + Shift + G (Win).