Grid Computing is either a distinct method of Computing or subset of Cloud Computing.
Cloud Computing evolves from grid computing and provides on-demand resource provisioning. Grid computing may or may not be in the cloud depending on what type of users are using it. If the users are systems administrators and integrators, they care how things are maintained in the cloud. They upgrade, install, and virtualize servers and applications. If the users are consumers, they do not care how things are run in the system.
Grid Computing requires the use of software that can divide and farm out pieces of a program as one large system image to several thousand computers. One concern about grid is that if one piece of the software on a node fails, other pieces of the software on other nodes may fail. This is alleviated if that component has a failover component on another node, but problems can still arise if components rely on other pieces of software to accomplish one or more grid computing tasks. Large system images and associated hardware to operate and maintain them can contribute to large capital and operating expenses.