You have to book 10 rooms in order to get a group rate...at least that is what is was in 2005 when we did a large family group. But there is a special contact person and you get discounts on tickets, etc. If you have a group of 25 or more people you can do special dining...by that I mean have a meal catered someplace unique on WDW property.
By booking you reservations as a grand gathering, they connect the room reservations and dining reservations. We have a group of 18 going in 63 days...and our room ressies are linked, but didn't do any dining. We have other plans for that.
If your group members call and make their reservations separately, you don't have to book as a grand gathering. If you call and book them all, even if they are paying separate, they will book it as a grand gathering.