Management groups are used to manage multiple Azure subscriptions. They provide a level of scope above subscriptions so that you can efficiently manage access, policies, and compliance for these subscriptions. Using management groups allows you to apply governance conditions uniformly across all subscriptions in the management group. Setting global policies at an individual subscription level would not achieve uniform governance efficiently, and Azure AD groups are primarily used for identity and access management, not for managing subscriptions and policies. Service Principals are for automation and application access control, and Azure Policy alone cannot group subscriptions for centralized management.