I am trying figure out the difference between the default Site Visitors group and the Viewers group. I have a site collection. I have a site (I'll call it site B) within the collection that inherits permissions from the root site collection site. Site B also has a subsite (site C). I put our All Staff Active Directory group in the default Viewers so that all staff would have general access to this collection. Though site C does not inherit from site B, it does still include the Viewers group. Users can log into root site and the site B, but they can't log into site C. Have I done something wrong? Perhaps I am misunderstanding the inheritance? I thought the subsites inherit groups and users, but who is actually in the groups is set at People and Groups > Groups which shows groups for the entire site collection.

I m not sure if I understand your question clearly. But let me try to explain.Where do you see Viewers Group in Site C? Do you see it in Site Actions --> Site Settings --> Advanced Permissions? This is nothing but Site Permissions. The users / groups in this list will have access to the site.I dont think you will see Viewers group in it. Let me know.

I turned out to be a wrongly created group - an AD distribution group rather and an AD security group.