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I am making a web application where users get and manage data from multiple tables as well as create other users to access said data. currently I have it set up for one group of users.

My question is would it be better to have multiple databases in which each database has its own user which is stored in a master table("I don't like the sound of this one") or have a column in each table defining the user group that has access to it? Are either of these a good idea or is something else more appropriate?

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You should have a column in each table. In my opinion, its the correct thing to do, and also you have only one database to do mantainance. Just imagine the time it would take to add a column to a table in the future, and you should do it in multiple databases.

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