Admins can search Groups and Contacts based on Field Set criteria and save them as Lists for quick access later. Just like other records in your database, you can:
What is a Smart List?
A basic list is one that will never change, while a Smart List will grow or shrink based on changes made within the database.
Ex. If I run a search for every member in my database who graduated in 2009 and create a Smart List from these results, any members who are to added to database in the future who meet this criteria (2009 graduate) will automatically be added to this list.
If I created the 2009 graduates as a basic list, the list would remain static. It will always remain the same.