Quick answer
A household is a group of guests who share one invitation but stay individual people in your headcount. Use it for couples, families and anyone at one address — and keep individual invitations for colleagues, friends invited separately, and anyone whose partner you have not met.
The problem it solves
Sending four invitations to one family looks careless. Sending one invitation and recording one "yes" for four people wrecks your catering numbers. Household grouping is simply the answer to both: address the invitation once, count the people individually.
How it works in practice
You create a household, add the people in it, and send the invitation to the household's contact. When that person opens the RSVP, they answer for each member — often "two of us can come, the children cannot" — and each answer is stored against the right individual.
Downstream, everything behaves normally: meal choices are per person, the headcount is per person, and seating can keep a household together automatically rather than by hand.
When not to group
- Colleagues who happen to live together but were invited independently
- A guest whose partner you are inviting as a courtesy plus-one rather than by name
- Adult children at the same address who should decide separately
- Anyone whose relationship status you are not certain of — an unwanted assumption is worse than an extra invitation
Names on the invitation still matter
Grouping is a data structure, not a greeting. "The Okafor Family" is right for a family with young children; "Mr and Mrs Okafor" or their actual first names may be right for a couple. Decide the wording per household rather than accepting a default that will read as impersonal to half your list.
The knock-on effect on seating
Households are also the unit most seating decisions are made in. When they are grouped, an automatic seat assignment can keep families together and split them across tables only when it has to — which is most of the seating plan done before you touch it.
A small thing that saves a real hour
Grouping takes a few minutes when you build the list and saves you the entire class of problems that starts with "did we count the Bakers as two or four?". It is the least glamorous feature in guest list management and one of the few that removes work rather than adding it.