Once in Contacts, click on the Manage Groups.

Type in your Group Title.

Click "Create Group."

A message appears confirming the new group added successfully.

Repeat the process to add more groups.

Click the Contacts tab, Click Manage Groups from the Sub-menu.

Select the "Edit Group" tab.

Drop down the list where it says "Select Group"

Select the group you would like to edit. 

Now you have the option to add contacts to that group from your main list as well as edit the title. 

Click on the Contacts tab.

Click Manage Groups

Select a group from the dropdown menu.

Click on Delete Group.

Here you have the choice to Delete Group / Keep Contacts or Delete Group / And Contacts.