From Diablo Wiki
A Diablo III party is a group of players in the same PvM game, cooperating to more efficiently kill monsters. In D3, all players in the same game will be automatically grouped into a party; you no longer have to request an invite, and there can not be multiple parties in the same game.
Since nonconsensual PVP has been removed from Diablo III, there is not a "hostile" button, as there was in D2. (The D3 Team is considering other ways to deal with in-game discord or "griefing" party members.
Due to these and other changes, theas it existed in Diablo II does not play a role in Diablo III.
See the D3 Multiplayer page for more details about how parties will work in Diablo III.