{grouping} is about the grouping mechanism in TeX, and about local and global assignments.
A group in TeX starts with { or \bgroup and ends with } or \egroup, or starts with \begingroup and ends with \endgroup. Many assignments are local within a group and influence only the code of that group. But there are some assignments that are always global and ignore group boundaries, e.g. box size assignments, font assignments, hyphenation assignments.
Some details can be found in:
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