To delete a Group, select Layer > Delete > Group or, with the Group selected on the Layers panel, click the trash can icon. Either method displays a dialog with the options to delete the “Group and Contents” (which deletes both), “Group Only” (which removes any groups but leaves the layers), or “Cancel”.

To delete the Group and all of it’s contents while bypassing the dialog select the Group on the Layers panel and either drag the Group to the trash can icon or, Option (Mac) / Alt (Win) -click the trash can icon.

Command (Mac) / Control (Win) -drag a Group to the trash can icon to delete a Group without deleting it’s contents.