So after searching some more I found an old plugin named au_subgroups but it seems to be very old and not managed anymore. Sounds like what I need so I may try to update it. I also found a plugin named Profile Manager which seems to almost do what I want but not quite so maybe I need to tweak it a bit also. In any case, thanks for bearing with me and any advice or other solutions great appreciated.

While there's no ready-made plugin, your problem can be solved with a custom plugin.

All you need to do is add a new "Category" field (input/text by default or input/tags for multi-categories) to the group creation form and organize pages with group sorting by category.

au_subgroups

Look at hypeGroups.

(Ismayil recently updated this plugin using AI, so give it a try, it might not work as intended.)

This plugin doesn't contain an interface for creating subgroups from the admin panel, so you'll also need a custom plugin to override the structure of your groups' subtypes.

Readme is very helpful.

Thanks for this will take a look.  Had to abandon the Profile Manager as I couldn't get it to show categories on the Groups page. Always showed the Elgg default group page no matter what I tried. hypeGroups looks interesting though.