A even space grid is placed over the world and each cell (3D) or tile (2D) is a node in the search space. Each node represent the center of the tile and the edges are the connections between adjacent cells. The grid size should be about the same as the smallest unit in the game.
Dynamic: It is easy to modify a cell to change the cost.
Localization: Going from world to search space is easy as dividing the coordinates with the grid resolution.
Memory Usage: A grid with a small grid size or a large world will be memory-intensive.
Planning: Planning can be expansive as grids are a fine-grain representation.
Smoothing:
Notes
Works well for 2D tile-based worlds.
Obstacles and characters can be marked on the grid for avoidance.
Reference