I think that there is a typo in the paragraph: 'x' used instead of 'y'
in 'GROUP BY'.
postgres-9.1beta3/share/doc/html/queries-table-expressions.html
7.2.3. The GROUP BY and HAVING Clauses
[...]
=> SELECT x FROM test1 GROUP BY x;
x
---
a
b
c
(3 rows)
In the second query, we could not have written SELECT * FROM test1 GROUP
BY x, because there is no single value for the column y that could be
associated with each group. The grouped-by columns can be referenced in
the select list since they have a single value in each group.
[...]
The paragraph should read "...SELECT * FROM test1 GROUP BY y..."
Cheers,
Gavin