What is the difference between Tags and Groups?

This seems like an extra, unnecessary step, as far as tags are concerned, or am I misunderstanding?

I appreciate the groups-as-saved-search model, but when it comes to tags, I feel like the act of tagging itself should group things together. Everywhere else I've ever used a tag concept  seems to work that way. But it sounds like here it only takes me halfway because I ALSO have to create a group that searches on that tag. So I have to make two things every time in order for the tags to be usable.

I have lots of ways I want to tag and group contacts, so doubling the steps required is a big pain. And some of them I wouldn't really use much, but I do want to be able to occasionally just browse through them and see who's in a given group. Is that really not possible?

On a similar note, when creating a group based on a tag, it gives you a "contains" option, but what it really is is "equals." So even if I have a decent naming convention in my tags, I still have to manually add all the related ones to a group one at a time. Whereas I'd expect "contains" to let me enter "ABC" and pick up contacts tagged as "ABC123" as well as "ABC456." Even if I make a new, extra, tag called "ABC", solely for the purpose of the group search, the "contains" option only picks up just that one tag, not "ABC123."