I'm gonna guess that he is referring to the start-game-option, of culturally linked starting locations. He wants to create a new grouping, so that a newly created civ would end up in the right place. That's my guess ...
I'm assuming your asking for the game setup for cultural grouping. IIRC it isn't in C3C but was in vanilla. That means that African Civs start together, Americans are together, etc. There were certain modifiers that made them like each other a little more than Civs from different cultural groups. I never found it to make much of a difference. I'm a warmonger so my near neighbors are usually my first victims.
The only other one is in choosing the style of your palace. That's purely your aesthetic choice - has no effect on gameplay.
As said in the posts above, the culture group determines how your cities and population will look and different from all what was said in the posts above, the culture groups have a light influence in the diplomatic behaviour of civs.
The number of culture groups in Civ 3 is limited to 5 (the 6th culture group "none" is for the barbarians). Unfortunately no other culture group can be added and the existing culture groups even cannot be renamed in the editor.
What you can do in the editor is to assign civs to one of these culture groups. If you, for example, want to build an "African" culture group you can determine the cities (and other graphics) of an existing culture group - let´s say here the mediterranean culture group - to be the African group and replace all mediterranean graphics with African graphics. In the editor (registry for the civilizations) you have to assign the African civs to the mediterranean culture group.
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