Definition: Grace is God's unmerited favor. It is kindness from God we don't deserve. There is nothing we have done, nor can ever do to earn this favor. It is a gift from God. Grace is divine assistance given to humans for their regeneration (rebirth) or sanctification; a virtue coming from God; a state of sanctification enjoyed through divine favor.
A preacher once explained grace to me with this acronym:
Examples: It is by grace you were saved through faith, and not of yourself. (Paraphrase of Ephesians 2:8.)