Teams helps you create logical groups of cross-functional members comprising architects, developers, testers and so on.
A team's view of backlogs complements the planning folder view. While planning folders represent backlogs (release, iteration, etc), a team's list view represents the team's view of the backlog (across releases, iterations, etc).
In an agile environment, project activities are broken into smaller units of work items and are assigned to various project teams. The Teams feature allows you to create these physical teams in TeamForge so that you get the specific team's view of backlogs. This knowledge of the team's view of work items helps you facilitate effective communication and execute project activities in a more structured and organized fashion. For example, you can easily view and filter artifacts which are taking longer than estimated within a team, analyze the scenario, and identify the impediments. Once identified, you can communicate them to the relevant team(s), re-assign it to other appropriate team(s) or team member(s), and resolve them quickly.