iOS 10 brings several significant changes to the Photos app, including the addition of two new folders: People and Places. With its new facial and object recognition capabilities, Photos uses "Siri intelligence" to scan through your photos and tag them based on the content. This allows you to search for similar objects and people, so for example, you can now search your photos for, say, "car" and you should be presented with all of your photos containing cars (and likely a few that don't).
One of iOS 10's new additions to the Photos app is the Memories feature, which basically assembles photos into short videos based on time periods or locations. It will also create memories of holidays from your home country. If you don't want this for any reason, you can turn off this option by heading to Settings -> Photos & Camera and toggling off the "Show Holiday Events" option.
Starting with iOS 10, the Photos app attempts to identify and group photos of people who it thinks are the same person. It doesn't always get everything right however, and you might see that you have two different groups of photos that are actually the same person. This is an easy fix, you can either identify the photos as the same person, in which case it will ask you if you want to merge the photos, or you can use the "Merge" option.
The People album contains collections of photos sorted by the individual person, which makes it easy to find pictures of friends and family. It will, however, identify and group just about every face found in your iPhone's photos, including strangers in the background. While you can hide people that you don't want at all, you can also tag people as favorites and then have your People album only show your favorites. There are two ways to tag somebody as a favorite.
Photos will identify and group similar faces found in your iPhone's photos, whether they are a friend or a complete stranger in the background. If your People album has some unwanted entries, you can hide them simply by choosing "Select" in the top right corner of the People album, then tapping on the person you want to hide and selecting "Hide" at the bottom. The person will now show up in the hidden people section at the bottom, and you can choose to not show this section as well with the "Show less" option at the top of the section.