What is the Difference between Groups & Sets?

Groups are used to create higher level category by using the lower level category members.

EX:
Customer wants to see "Territory", which is combination of "Region" members.

Sets:
Sets- are custom fields that define a subset of data based on some conditions. Computed sets update as data is being changed.

-> Alternatively, a set can be based on specific data point in your view.
Sets are sub set of data, which are derived from either only Dimension or combination
of Dimension & Measures.

Difference B/W Groups & Sets:

1) Groups are created Manually, we cant use them in  any Calculated fields.
Sets are created either using manual or calculated fields and can use in calculated Fields.

2) We can't use GROUPS in Calculated fields, but can use SETS.

3) We use sets for Analysis
EX:  Set 1  Union  Set2