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I am trying to create a service principal a.k.a. app registrations in Azure that has the required permissions to create and delete resource groups (and proceed to manage the resources of those resource groups after).

When I create a service principal, it only has access to the content of resource group that itself belongs to.

Here is a screenshot of my attempt so far. This is under App registrations: enter image description here

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If my understanding is right, you need give your service principle Contributor role.

Note: Contributor can create and manage all types of Azure resources but can’t grant access to others.

You could do it on Azure Portal. <your subscription>--><Access Control>--><Add>.

enter image description here

More information about this please refer to this official document.

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