Here's how it's used:
* A chapter of a book: This is a division of a book, not a group of people.
* A chapter of a fraternity/sorority: This refers to a local branch of a national organization.
* A chapter of a club/society: Similar to a fraternity/sorority, this refers to a specific group affiliated with a larger organization.
So, while "chapter" can sometimes refer to a division in a book, it's primarily a collective noun for a group of people within an organization.