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Assuming you're using the core 'users/save-user' action (as per the official User Profile form example) you can add a form input named groups to enable group assignments.

Again, assuming you're posting the form to the core 'users/save-user' controller action, Craft will handle permission checking for you. But, it's probably a good idea to not expose any user group options that the current user doesn't actually have the permission to assign users to. A quick way to do that is using the currentUser.can() method within a Twig |filter, checking the assignUserGroup:groupUid permission for each group:

{% set userGroups = craft.app.userGroups.allGroups()|filter(group => currentUser.can("assignUserGroup:#{group.uid}")) %}

Once you have your userGroups array, you can build a dropdown:

<form method="post" accept-charset="UTF-8" enctype="multipart/form-data">
    ...
    <label for="group">User group</label>
    <select id="group" name="groups[]">
        {% for userGroup in userGroups %}
            <option value="{{ userGroup.id }}"{% if user.isInGroup(userGroup) %} selected{% endif %}>{{ userGroup.name }}</option>
        {% endfor %}
    </select>
    ...
</form>

Or if you prefer, checkboxes (notice the hidden input name="groups" above the actual checkbox inputs; that's there to make it possible to submit the form without any groups checked):

<input type="hidden" name="groups" value/>
<fieldset>
    <legend>User groups</legend>
    {% for userGroup in userGroups %}
        <label>
            <input type="checkbox" name="groups[]" value="{{ userGroup.id }}"{% if user.isInGroup(userGroup) %} checked{% endif %} />
            <span>{{ userGroup.name }}</span>
        </label>
    {% endfor %}
</fieldset>

Or radio buttons:

<fieldset>
    <legend>User group</legend>
    {% for userGroup in userGroups %}
        <label>
            <input type="radio" name="groups[]" value="{{ userGroup.id }}"{% if user.isInGroup(userGroup) %} checked{% endif %} />
            <span>{{ userGroup.name }}</span>
        </label>
    {% endfor %}
</fieldset>