What is Initiating Process Group?

In layman term, the Initiating process group is the phase where all pre-requisite activities will be carried out in order to do a project. These tasks involves identify and get the project resources including PM, conduct due-diligence process about the project, perform initial cost estimation, submit the proposal(i.e Project Charter) to management and obtain the approval to start project. At the end of this phase, the PM will have the resources, money, approval to start the real work of the project.

Guys, I have given the layman term description in very low level just to quickly grab the essence of the Initiating process group.

For exam purpose, refer the proper PMBOK 3 definition not my layman description. PMBOK 3 definition as follows:
Initiating acknowledges the beginning of a project or a project phase. The followings will occur in this phase.
1. Project Manager assignment

2. Project Manager receives the authorization to start/begin project or project phase

3. Project Manager receives the approval to commit the organization or company’s resources to work on the project or project phase

Objectives
1. Conduct Project Selection Methods

2. Define Scope of the project

3. Identify and define Project Risks, Assumptions and Constraints of the project

4. Identify and Perform Stakeholder Analysis

5. Develop Project Charter for the project6. Obtain Project Charter Approval

Knowledge Areas & Processes
Refer the PMBOK 3 and your Project Management Study material for more details.