How to create a group chat on iMessage?

Make sure you have both iMessage and MMS turned on in Settings > Messages.

1. Open the Messages app on your iPhone. ... 
2. Tap the Compose button in the top-right corner of the screen.
3. Begin entering the names of the people you want to include in the group chat in the To: section. ... 
4. Type out your message, then tap the Send icon.

I think it's possible that khajotia meant "Make sure you have both Group Messaging and MMS Messaging turned on in Setttings>Messages."

If you don't see those settings, contact your carrier and have them add them to your account.