A fully managed event-routing service based on the publisher/subscriber pattern. It reacts to discrete events (a blob being created, a resource changing state) and routes them to handlers such as Functions, Logic Apps, or Service Bus.
On AZ-305 you choose Event Grid for low-latency, reactive event-driven architectures (e.g., triggering a Function when a file is uploaded to Blob Storage). It differs from Event Hubs: Event Grid routes discrete events, while Event Hubs ingests massive, continuous data streams.
Azure Event Grid is a concept that can show up on the exam. Check the full guide to see it in context.