To my knowledge you cannot change the color of the names above folks head based on group. You can turn them always-on for all of your raid (or group) or on target/mouseover only, but you cannot change the color or just have your group and not other groups in raid.
Personally I run with names off except on target/mouseover.
If you want to know where your groupmembers are in relation to you, there's always the map.
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