In numismatics grade is the objective description of a coin physical condition. The grade directly determines the coin value. The international standard is the 70-point Sheldon Scale.
The Basics of the Sheldon Scale
Good (G-4 to G-6) means heavily worn with the design visible but details flat. Very Fine (VF-20 to VF-35) means moderate wear on high points but all major details and lettering are clear. Extra Fine (XF-40 to XF-45) means light wear on the highest points only with some original mint luster remaining. Mint State or Uncirculated (MS-60 to MS-70) means a coin that has never seen circulation with no wear whatsoever. An MS-70 coin is flawless under 5x magnification.
Third-Party Grading
Because grading can be subjective many collectors send high-value coins to independent third-party grading services like PCGS or NGC which authenticate, grade and seal coins in a tamper-evident plastic slab.