I think primarily your most top level item will always be a group.
Once you have a group established you need to add term sets.
So it seems 1 group : (many) term sets (children).
What is the difference between a group and a term set?
While on the subject, is it possible to nest term sets? From the click and point GUI management in central admin it seems that the structure is like this:
GROUP TERM SET TERM TERM TERM
GROUP TERM SET TERM TERM SET TERM