When two cats groom each other, it means they want to leave their scent on each other. Most of the time, cats groom each other because they are very affectionate. In the feline world, they identify each other by scent, and cats in the same family share a common smell. Grooming effectively transmits this scent, so grooming each other helps them to smell alike.
Cats grooming each other also symbolizes status. Generally, the "leader" cat will groom the other cats as a sign of care (protection). This is because in the cat world, only the alpha can groom the underlings.
