A canopy formation is a formation built by parachutists who fly their parachutes in close proximity to each other, and then taking grips on other jumpers parachutes.
The practise of building such formations is known by different names; canopy formation (CF), or canopy relative work (CRW or CReW).
To learn canopy formation work you first need 100 skydives on ram air parachutes, before a coach will introduce you to this very visual and dynamic part of skydiving.
Safety Brief - Training Plan - Coaching System - Canopy Formation Manual
..