To disband is to stop existing as a group, or to make a group stop. A band disbands when the members no longer play together. A club can disband at the end of the year. A government can disband a unit. The word is for organisations, teams, clubs, committees, and armed groups. It is not for a pile of papers, and it is a little heavy for a friendship between two people (you would say they split up, or the friendship ended). It can happen from inside — the group decides — or from outside — someone in charge shuts it down. After a group disbands, the people still exist; the organisation does not.