I've searched this one out and never found a solid explanation.

When it says players as a group cannot play more than 1 Ally.

Can anyone clarify this?

If it's on the table is it not "in play" and being played?

In planning phase, if some player pays the cost of one ally to play him from hand, no more players can do it in the same round. They must wait for next round.

But there are events like Hand and Fight, Sneak Attack..., that make able to put allies in game without playing them from hand.

So you can have as many Allies as possible in play, and use them to do whatever, but you can only put one into play per round (as a group)?

We played it that you could only have one ally in play as a group. That made it super-hard, and we got right to the end before losing.

So you can have as many Allies as possible in play, and use them to do whatever, but you can only put one into play per round (as a group)?

Almost correct! You can only play one ally per round, as a group. But (as Mndela pointed out) there are cards that let you skirt this restriction, like Sneak Attack or Stand and Fight, since those cards let you put an ally into play , which is different from a rules standpoint. You're not restricted as to how many allies can be on the table at any given point.

By eowyn you can discard an ally, and with Stand and Fight, put him into play. ^^

Another way (harder but) is playing tales (maybe with sneak and another ally in game?)