We study the connection between the Goodwillie tower of the identity and the lower central series of the loop group on connected spaces. We define the simplicial theory of homotopy n-nilpotent groups. This notion interpolates between infinite loop spaces and loop spaces. We prove that the set-valued algebraic theory obtained by applying $��_0$ is the theory of ordinary n-nilpotent groups and that the Goodwillie tower of a connected space is determined by a certain homotopy left Kan extension. We prove that n-excisive functors of the form $��F$ have values in homotopy n-nilpotent groups.

16 pages, uses xy-pic, improved exposition, submitted