Is it possible to create user groups if we use local password resolver(/etc/passwd)

Hello All,
We are using “/etc/passwd” file of our privacy Idea server as our resolver for the users. Now we are exploring if we can create user groups using this resolver. It will be great help if you can provide any guidance or documentation regarding the topics. Thanks in advance.

No. The flat file does not know user groups!
However, you could have several flat files and create a resolver for each file and then put all these resolvers into one realm.