How to tell: Check the Layers Dialog to see if the active layer is actually a Layer group. When a layer group is not empty, a small icon or appears in front of the layer group's thumbnail and name. Most actions don't work on a layer group, in which case an error message will show up: “Cannot paint on layer groups.”

How to fix: You need to make a layer active that is not a layer group. Select a layer by clicking it in the Layers Dialog. If the active layer group has a + sign in front of it, it is collapsed. You can click it to expand and show the individual layers inside that group.