diff --git a/lib/ansible/inventory/group.py b/lib/ansible/inventory/group.py
index 73d432e545f..e7a96bb1ac3 100644
--- a/lib/ansible/inventory/group.py
+++ b/lib/ansible/inventory/group.py
@@ -96,6 +96,8 @@ class Group:
             # isn't already a group with the same name
             if self.name not in [g.name for g in group.parent_groups]:
                 group.parent_groups.append(self)
+                for h in group.get_hosts():
+                    h.populate_ancestors()
 
             self.clear_hosts_cache()
 
diff --git a/lib/ansible/inventory/host.py b/lib/ansible/inventory/host.py
index 3902471e54a..3289d7e1628 100644
--- a/lib/ansible/inventory/host.py
+++ b/lib/ansible/inventory/host.py
@@ -106,27 +106,42 @@ class Host:
     def set_gathered_facts(self, gathered):
         self._gathered_facts = gathered
 
+    def populate_ancestors(self):
+
+        # populate ancestors
+        for group in self.groups:
+            self.add_group(group)
+
     def add_group(self, group):
 
-        self.groups.append(group)
+        # populate ancestors
+        for oldg in group.get_ancestors():
+            if oldg not in self.groups:
+                self.add_group(oldg)
+
+        if group not in self.groups:
+            self.groups.append(group)
 
     def remove_group(self, group):
 
-        self.groups.remove(group)
+        if group in self.groups:
+            self.groups.remove(group)
+
+            # remove exclusive ancestors, xcept all!
+            for oldg in group.get_ancestors():
+                if oldg.name != 'all':
+                    for childg in self.groups:
+                        if oldg in childg.get_ancestors():
+                            break
+                    else:
+                        self.remove_group(oldg)
 
     def set_variable(self, key, value):
 
         self.vars[key]=value
 
     def get_groups(self):
-
-        groups = {}
-        for g in self.groups:
-            groups[g.name] = g
-            ancestors = g.get_ancestors()
-            for a in ancestors:
-                groups[a.name] = a
-        return groups.values()
+        return self.groups
 
     def get_vars(self):
 
diff --git a/lib/ansible/vars/__init__.py b/lib/ansible/vars/__init__.py
index 8841384accd..5afdfd14ee6 100644
--- a/lib/ansible/vars/__init__.py
+++ b/lib/ansible/vars/__init__.py
@@ -403,8 +403,7 @@ class VariableManager:
         variables['ansible_playbook_python'] = sys.executable
 
         if host:
-            variables['group_names'] = sorted([group.name for group in host.get_groups() if group.name != 'all'])
-
+            # host already provides some magic vars via host.get_vars()
             if self._inventory:
                 variables['groups']  = self._inventory.get_group_dict()