The three methods of organizing users in a Canvas course, by using Groups, Tags and Sections, each have distinct use cases and functionality.
Groups
How can Groups be used?
Groups are designed for collaborative activities in Canvas. Group assignments allow a single submission to be applied for multiple students, and group discussion boards enable discussions to take place among a specific group of students.
Students are aware of the groups that they are in, as well as who the other group members are. Groups can be used for filtering the Canvas Gradebook. Announcements can be posted to specific groups when accessing the group page.
How are Groups created?
Teachers/TAs create and manage Groups.
Tags
How can Tags be used?
Tags allow faculty to label students privately. Tags can be used to assign differing course content and due dates to a subset of students and to filter the Canvas gradebook. These tags are not visible to students. A student will not see the tags associated with themselves or with others.
Tags can be used within the Canvas Inbox, but they cannot be used for announcements. Tags are isolated to the course in which they were created and will not follow a student to all of their courses.
How are Tags created?
Teachers/TAs create and manage Tags.
Sections
How can Sections be used?
Sections can be used for assigning different course content and due dates to each section, such as in the case of a general education/honors combined course or an undergraduate/graduate course. Sections can also be used to filter the gradebook and to send announcements in the course.
In rare cases, sections can be used in organization/non-credit courses, but most use cases can now be addressed with Tags (the preferred method).
How are Sections created?
Sections are created in for-credit courses based on the course listings in the Student Information System. Sections cannot be created manually in courses, as their creation can interrupt the add/drop/withdrawal processes that occur in these courses.