Joomla! has the functionility of Usergroup, but it can be applied from admin panel only. Off course you can set default usergroup, which should be applied to user on registration. But you can set only one. Usergroup Selector allows you to chose those usergroup(s) which should be allowed to select by user, at the time of registration from front-end. On behalf of this you can do many other task, link which subscription plans should be displayed to which usergroup's users. But make sure you do not allow any Administrator or Super User group, to select from front-end.
Note : If you are using 1.0 veriion of this plugin, then you need to un-install it and intsall the new plugin. Because 1.0 was a system plugin and 2.x (and onwards) it is a User plugin. You need to re-configure the plugin again.