creating groups and user and passwd is a root dude only thing, you have to go su or su - or sudo in order to create. change, these items.
when you try to use newgrp and it asks for password it is talking about the root user pass word not user pass word.
when you are in a user login and you su then enter password you've essentially just bypassed typing sudo newgrp then it'd prob still ask you for a pass word, all depending on how you have your sudo user(s) set up in the suduers file, in /etc. you can fix it so you do not have to use a pass word on sudo <command> .
what you did by using su first is just put yourself into superUser Mode that has root access is all, instead of loging out then back in as root.
too you mayhave to ensure that the user is attached to the group your working with newgrp is new to me. though it is logical that one has to be attached to a group before they can log into it as I just read about his newgrp
command a little bit . but just the same try using root pass word and see if that is it.
by what this reads is looks just like using su or sudo but not su - then a password for vaildate the login, giving that person the rights that this group has .. but not on a file, yes just within that other person login session.
when you touch filename it automaticly gives it the one who created it ownership and there group attached to it.
this is interesting I've never seen this newgrp before...
so basicly forget everything (almost everything I just said) it seems logically you'd be getting asked for the password of that group. but again the group itself and not a file attached to that group.
newgrp is used to change the current group ID during a login session.
If the optional - flag is given, the users environment will be reini-
tialized as though the user had logged in, otherwise the current envi-
ronment, including current working directory, remains unchanged.