We show that accounting for internal character among interacting, heterogeneous entities generates rich phase transition behavior between isolation and cohesive dynamical grouping. Our analytical and numerical calculations reveal different critical points arising for different character-dependent grouping mechanisms. These critical points move in opposite directions as the population's diversity decreases. Our analytical theory helps explain why a particular class of universality is so common in the real world, despite fundamental differences in the underlying entities. Furthermore, it correctly predicts the non-monotonic temporal variation in connectivity observed recently in one such system. Dynamical grouping underlies myriad collective phenomena across the physical, biological, chemical, economic and social sciences [1][2][3][4][5][6][7][8][9][10]. Whether the underlying N objects are particles, people or proteins, the issue of whether they evolve as isolated individuals or aggregates has significant consequences at the macro-level [7][8][9][10][11][12][13][14][15]. Super-radiance is driven by two-level systems coupling coherently via a background boson mode [16]; many neurodegenerative diseases are driven by aggregation of proteins [17]; large market movements are driven by traders' herding [18][19][20]; insurgencies are driven by informal human groupings [21][22][23][24] as are gangs and online guilds [25]; brain activity features collective neuronal avalanches [26]; and many-body coherence phenomena are impacted by connectivity within exotic materials [27,28] and networks [13,14].