Sub-groups in TouchWorks are found in TWAdmin under the Group Admin VTB. What defines a sub-group is not a simple answer. Sub-groups can be whatever they need to be. They are entities that have something in common with regard to the TouchWorks Order or Charge modules. They are often the sub-categories on the order requisition or former paper charge slip (encounter form/super bill).
Groups contain sub-groups. In this example, let's assume we have a group called "OB\GYN." We would build sub-groups for diagnoses, procedures, modifiers, etc. for OB\GYN. As we are building the sub-groups they are assigned to a group. For example, we might create a sub-group for "new patient visit charges" and additional sub-groups for "established patient visit charges" and "Consult visit charges" etc.
The former can also apply to the construction of orderable items in the Order Entry module. Orderable items tend to differ slightly in this regard since the browsing method for them on the Order Entry page is dependent on how the items are classified in the Item Dictionary. In a situation where you are looking to organize orderable items that are classified as Laboratory you might build sub-groups to hold Serology, Hematology, or Chemistry items. In order for the end user to see these sub-groups you would have to assign the Group to a user.