My understanding, and I may be wrong here, is that all Flyertalk members are assigned to 'groups' and that group name is displayed underneath the member's handle.

Some groups are:
Moderator
TalkBoard Member
Flyertalk Evangelist
Original Member
etc.

And I think it has to do with (at least in some cases) granting system permissions.

It might be possible to grant the relevant moderator permissions without creating a moderator 'group' - that is, to have Dan grant the permissions one member at a time (and then remember to take those permissions away individually if appropriate, rather than just take a member out of the moderator group).

My sense is that the user 'group' feature was the easiest way for the FT admin folks to tackle the issue, though it might be possible for them to add a bit of work to the process to change the way this is done if it's widely considered to be a problem.

[Posting in a personal capacity only and not as a member of any group, and probably wrong in any case]

Gary