Hi @Sarah Aslam ,
By default, any user in a tenant can create a Microsoft 365 Group by creating a new resource in a Group supported app. Tenant Administrators do have the option of restricting who can create Microsoft 365 Group.
Also, Administrator can run the following PowerShell commands to enable Office 365 group creation for users who applied OwaMailboxPolicy-Default Policy:
- Connect to Exchange Online PowerShell
- Run this commend:
set-OwaMailboxPolicy -GroupCreationEnabled $true -Identity OwaMailboxPolicy-Default
Refer to this official article.