The site home page (which lists all groups on the server) contains a form with a 'Create New Group' button in it. The way most sites are set up, pressing the button will ask for the 'create group' or 'site administrator' passwords. (There is of course an 'anyone can create groups' setting in Site Admin to bypass this).
If you really do want to hide the button (from everybody, including admins), you can do so via a little HTML and Javascript trick. In Site Admin, go into 'Messages', and then at the end of your 'Home page message', add this:
<script>document.forms[0].style.display = 'none';</script>
If you later want to create a new group, you could just remove the line, create the group, and put it back.