It's just a way to express that you like something or think something's cool.
"This song is groovy"
Someone hands you a soda "groovy my dude". It's just like saying "sick" or "sweet"
If you've ever seen evil dead 2 or Army of Darkness, see how Ash (Bruce Campbell) uses it.
Depending on the circumstances, you can't avoid speaking to some people.
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Nice!
I haven't, but it's something I thought about this past year and am deciding to start incorporating that word and others.