Subgraphs
A subgraph is a special kind of group that can be expanded to show the hierarchy inside it, or collapsed to make it a single compact object.
To make a subgraph:
Select some objects on the canvas.
With the objects selected, choose Arrange ‣ Group as Subgraph. Your objects are enclosed by a subgraph rectangle.
Style and label the enclosing rectangle however you like.
To collapse a subgraph, select it and then choose Collapse Subgraph from the Arrange menu (or from the contextual menu that appears when you right- or Control-click the subgraph). The objects contained in the subgraph are hidden away, and the subgraph becomes a single object. Any incoming or outgoing connection lines belonging to objects in the subgraph become incoming or outgoing lines of the collapsed object itself. 
Subgraph members can be selected and edited just like group members: click once to select the subgraph, then click again to select a member inside.
You can resize the containing rectangle, as long as you don't make it too small to contain its member objects.
To disassemble a subgraph, select it and choose Ungroup from the Arrange menu.