Avichal said:
Can you please give some practical examples and how its useful.
This is what I know. A group is when an operation on a set is closed, has identity and inverse element. Why do we define a group in this way - I have no idea.
For practical examples, you have both concrete applications, such as applications to physics, and abstract applications, such as the fundamental group of a topological space. In the later case, one case see that groups show up as mathematical structures in all kinds of places, so it's worth while to study them by themselves to economize our understanding of mathematics. Abelian groups are also part of one way to define vector spaces. Groups are also a simplified example of a Field, which the real numbers are an (obviously) important example. One last example: groups are used in some results of algebraic number theory. I hope I'm painting a picture where groups show up in lots of places in mathematics, so the particular choice of definition is a useful one.
For more practical examples, you can look to physics. Any kind of symmetry can be modeled using group theory (if you like, you can use that feature to motivate the definition of a group). Lorentz transformations, which relate two different reference frames in special relativity, form a group. Also other symmetries show up, called "gauge symmetries", show up in quantum field theory, and these also form groups. In general relativity, the R coordinate in the Schwarzschild metric is defined using orbits of a group. By studying group representation theory (closely related to group theory), one can derive the quantized "spectrum" of angular momentum in quantum mechanics.
Did you study the symmetry group of any object? If not, perhaps the best thing you could do is find some object with symmetry, and consider it's "symmetry transformations". Convince yourself that the set of symmetry transformations are a group: is there an identity transformation? is there an inverse transformation? is the action of two symmetries also a symmetry? are symmetries associative?
The answer to all those questions are yes, but you should really convince yourself that its true by physically holding something that is symmetric and rotating it accordingly.