I received the following answers to my question from users outside this forum
The error message, like many others in SharePoint, is misleading. You can only add individuals to the site-collection admins. The Central admin (SCA) can only handle two. You need to go to the site-collection to add a third or fourth person. Regardless where this is done, you can only add individuals.
Dov Trietsch
Computer Software Consultant and Author
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As an alternative, you can achieve the same thing by using Web Application Policies (accessible from Central Administration --> Application Management)
You can use these to give AD Groups full control, read (or even deny access completely!) to all content within a Web Application.
The only problem of that is it will apply to all of the site collections in that Web Application. Depending on your site collection taxonomy, that may or may not be appropriate.
MCTS SharePoint | MCPD