This does not mean that all the participants have to be at the same stage of development, but it probably does mean that they should be travelling along much the same path, albeit at different distances and speeds along that path.
This commonality of interest allows the possibility of an effective consensus, which can be passed to the next level, representing the group as a whole. What are the right numbers for a group? If the issues revolved around trade or currency unions, then economic analysis can offer useful guidance on which countries should be included. Who are (or potentially could be) good trade partners?