Unix is, at its very core, a multi-user operating system. It was built from the ground up to provide services to a number of simultaneous users. Because of that, it features a simple, but effective, method for restricting users to only parts of the system they should have access to. The Users and Groups module in Webmin attempts to provide a nice frontend for those features of the system. Each Unix has differences in how users and groups are implemented, however, Webmin hides those details quite effectively so that you never have to think about it. The Webmin Users and Groups module edits several lsystem files, depending on your OS. Usually, the files are: /etc/passwd or /etc/shadow, and /etc/group or /etc/gshadow. Note that the shadow versions of the above are far more secure than standard passwd files. Shadow passwords are standard on most Linux distributions today, and many other systems as well.
Clicking on a user name or group name will take you to an Edit User page, allowing you to edit all facets of the account. Note that changing the user or group ID at some point in time after the account is created is risky, as permissions are set by ID, not user/group name. While the module will change these for you on the home directory, there may be user programs or even system programs that rely on the UID to remain the same. Also note that on some systems (Red Hat and probably other Linux distributions) the user and the user's primary group are always the same name by default. Red Hat's adduser will create a group of the same name and ID as the user. You should not change this behaviour, unless you really know what you're doing, as the system relies on this for much of its access control flexibility. Users can have secondary groups, which can be set to any group(s) you need.