A FormGroup in Angular is a way to group multiple form controls together. You create it by making a new FormGroup object and passing in controls like firstName and lastName. Each control starts with an initial value, often empty. When the user types in the form fields, the FormGroup updates its value object to hold the current values of all controls. It also tracks if the form is valid or not, depending on validators. In the example, typing 'Alice' and 'Smith' updates the FormGroup values. Clearing firstName again keeps the form valid because no validators are set. When the form is submitted, you read the FormGroup's value to get all the data entered. This helps manage forms easily and reactively in Angular.