Looks like a grinding wheel to me. It would have sat in a stand with a horizontal axle, and rotated by a foot pedal and a "bell crank" arrangement. It would have been used to sharpen farm implements..axes...etc and perhaps knives.
The groove
may have been there to channel water from a container located above the wheel. The water drip/dribble would have been used as a coolant/lubricant during sharpening and also to
clean the grinding particles off wheel as it rotates.
It either still has.....or did.. have an iron hub in the center.
Another explaination for the "Groove" in the grinding face of the wheel could be the person using the wheel only sharpened one type of tool every time and wore the ""groove" in the grinding face through choice....or negligence.
Todays "Powered" grinding wheels are routinely
"Dressed" with a special wheel dressing tool every now and then to keep the wheek grinding surface clean and flat....and the wheel balanced. An Unbalanced wheel in todays "powered" world can actually "Explode"...ie: come apart... if it's not kept in balance. With a foot powered wheel it wouldn't matter.
NB