"A significantly large group of individuals who perceive themselves to have a common affinity for one another because of their shared language, religion, ethnicity, residence, class or caste, situation, etc., or combinations of these. For evangelization purposes, a people group is the largest group within which the Gospel can spread as a church planting movement without encountering barriers of understanding or acceptance."
In many parts of the world lack of understandability serves as the main barrier and it is appropriate to define people groups primarily by language with the possibility of sub-divisions based on dialect or cultural variations. Groups defined by language are usually called "ethno-linguistic" people groups.
In other parts of the world, most notably in portions of South Asia, acceptance is a greater barrier than understandability. In these regions, caste, religious tradition, location and common histories, plus language may define the boundaries of each people group. These South Asian groups are often called communities or jati people groups.
Joshua Project uses the terms "people", "people group" and "ethnic people" synonymously. However, others may distinguish between the terms.
“There has been constant debate over the classification of ethnic groups. Membership of an ethnic group tends to be associated with shared cultural heritage, ancestry, history, homeland, language or dialect, the term culture specifically including aspects such as religion, mythology and ritual, cuisine, dressing style, etc. By the nature of the concept, ethnic groups tend to be divided into ethnic subgroups, which may themselves be or not be identified as independent ethnic groups depending on the source consulted.” (From Wikipedia article List of contemporary ethnic groups)
Joshua Project people groups are coded with a unique PeopleID3 value. Often the acronymns PGAC (People Group Across Countries i.e. without considering political boundaries) and PGIC (People Group In Country) are used. For example, there is one Uyghur ethnicity (PGAC), but the Uyghur reside in over 10 countries e.g. the Uyghur in China (PGIC). People group lists have traditionally used PGIC counts.
People groups are the third level of the hierarchical Ethnic Peoples tree.
Source: 1982 Lausanne Committee Chicago meeting, Joshua Project and Wikipedia