Within the Group option in Confluence Admin menu, there is no option to add a new group. Is this a permissions issue? The version of confluence in question is version 5.5.2 and is running in a dev environment on IE 8.
When you go to the top-right cog icon, do you see "User Management" in the dropdown? If yes, click it. You will then need to navigate to "Groups" on the lefthand side under "Users and Security." Click on this, then you should see a fairly unassuming link called "Add Group"
Also to note: I am accessing this using the default confluence-administrators group credentials.
What is your user directory? Confluence internal directory, atlassian crowd, LDAP?
For example, if you have atlassian crowd or LDAP and you don't have permission to write in these directory, you're not be able to creat group
Check in User directory>Edit
If you are using a Diretcory as Read Only, and this directory is on the TOP of the User Directories list, you'll not be able to create it.
So you have two options:
1) Set your LDAP Directory as Read only with local groups;
2) Put your Internal Directory on the top so you'll be able to create Internal Groups;
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