A Battle Grid is created when every player taking part in a battle has accepted each other's challenge - verbally or otherwise, presumably by a personal GUI command - giving each opponent time to prepare and enter the fight in knowledge and fairness. In addition, it isolates fighters from the outside world so that their battle isn't interrupted by what happens around them. If a fight starts, no one can get inside the grid until it vanishes at the end of the battle (the only exception being when Alpha used of the Forbidden Power to do so in Episode 4). A Battle Grid can welcome any number of players wishing to fight against one another or even simply spectate - as pictured above.
Whereas a Battle Grid is needed to fight in ;Mechcity in order to respect the tranquility of those only wishing to socialize, its use is rare in ;Lavendera, since it is a free-fighting zone, where there are less rules and it is perfectly allowed to attack others by surprise.