Grouping is something completely different, and the Warlight map editor hates it. So it's better never to group anything. I still have no idea of how this tool doesn't work for you, but you can try an alternative way.
Let's say you want to draw New Zealand from this picture:
![](
http://0.tqn.com/d/geography/1/0/J/H/new.jpg)
Then first you draw it like this, with a sort of a bridge connecting the two:
![](
http://i39.tinypic.com/v7a0bp.png)
Then you go into the mode I described earlier by double-clicking the territory, and click on any of the two sides of the "bridge". The two adjecting nodes should flash up yellow now:
![](
http://img109.imageshack.us/img109/7669/zeeland2.png)
Then you click this button, and the line between the two will disappear!
Do that to both sides:
![](
http://img21.imageshack.us/img21/7669/zeeland2.png)
After that, you have two territories with "holes" in them. Select the two nodes on both sides of the holes, and click the button left of the one already described:
![](
http://img201.imageshack.us/img201/7669/zeeland2.png)
And it will connect! Do that on both sides and your result is:
![](
http://img26.imageshack.us/img26/7669/zeeland2.png)
And: as soon as you have given it a proper ID, Warlight will treat it as a single territory!