If you wish to allow all users to create groups that may be viewed by people who are not members of your site, set this option to 'Everyone'.
In a public group, anyone who finds your site (including search engines) will be able to see the group's "About" page, and all discussions in the forums. However, people will still have to become a member of the site before they can perform other actions such as posting to the forums or viewing user profiles.
Viewing the list of group members for group members and non-members can be restricted by the group administrator.