Control Permissions by Groups

Hello All,

I am looking to establish functionality that would allow me to group users together and then control the permissions for that group.

Scenario: We have a group of users that we want to be able to post content of their own (so I have made them Authors), but we also want users to be able to edit content that was create by someone in their group.

Is this possible?
Do plugins exist to make this happen?
Is there documentation I should read on this topic?

Thanks,
Rich