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The concept of using groups to assign permissions in AWS Identity and Access Management (IAM) is essential for managing permissions efficiently. Groups allow an administrator to create a collection of users who share similar job responsibilities or roles within an organization. By assigning permissions to a group rather than to individual users, an administrator can streamline the management of permissions and reduce the chances of errors that may occur when dealing with numerous individuals.

When a user is added to a group, they inherit all the permissions that are associated with that group. This is particularly useful in larger organizations where employees may have similar access needs based on their role, such as developers, managers, or analysts. This way, changes to permissions can be made at the group level, making it easier to update access as roles change without having to adjust individual user settings repeatedly.

Overall, using groups to assign permissions helps maintain a structured approach to access control, ensuring that users have the appropriate rights to perform their job functions while adhering to security principles.