In your dashboard, go to MY CONTACTS > CONTACTS & GROUPS. Once there, you'll see your groups listed. Beside all groups, you'll notice a delete button (). Click that to delete the group. This will keep all of the contacts in your active contacts but will remove them from that group.
If you want to keep the group and just get rid of the contacts to start fresh in that group. Just delete the group and then create a new group with the same exact name.