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Active Directory (AD) is a Microsoft brand for identity-related capabilities. In the on-premises world, Windows Server AD provides a set of identity capabilities and services, and is hugely popular (88% of Fortune 1000 and 95% of enterprises use AD). This topic includes all things Active Directory including DNS, Group Policy, DFS, troubleshooting, ADFS, and all other topics under the Microsoft AD and identity umbrella.
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We create all groups on-prem and allow it to sync in Azure that way we still have central management for our groups.
I do have groups created in Azure, but I created these group in Azure because the users I have added to those groups are O365 users only and they have no on-prem account.
Its easier to create groups on-prem and manage on-prem an just allow ADConnect to sync those group to Azure AD. Thats my opinion anyway.