By default, XFCE does not allow you to reorder the windows in a panel by dragging and dropping them. If you go in to the Window Buttons settings for your panel (under Panel Preferences), you can disable the sorting order for a panel’s windows and select "None, allow drag-and-drop". If you do this, you will be able to sort your windows by dragging and dropping. However, you will lose your ability to choose their default sorting order. It appears that you are forced to sort them by opening order, which I think corresponds to the "Timestamp" setting.
Is there any way to have both drag-and-drop enabled and a choice of default window order? For example, I’d like all of the windows from one program to be side-by-side until I say otherwise by dragging and dropping. This would correspond to using both the "Group title and timestamp" setting and the "None, allow drag-and-drop" setting, but I can’t find a way to have both at once.