For cloud-init scripts to work, basic condition is that since its a ubuntu package, it should be installed in the image (type apt-get install cloud-init to install). If you want to configure instance at boot time the Cloud-Init enables the support of several different input formats for user data

1. shell scripts, that start with #!
2. Cloud-config files that start with #cloud-config

Using Shell script

The following is the shell script for adding group

#!/bin/bash
groupadd abc

Using Cloud-init:

The following will set hostname to xyz on the instance

#cloud-config
hostname: xyz

Similarly you can go on adding lines to the scripts and achieve the desired functionality. Furthermore see cloud-config and this.