The Collaborative International Dictionary of English v.0.48:

Grade \Grade\, v. t. [imp. & p. p. Graded; p. pr. & vb. n.
   Grading.]
   1. To arrange in order, steps, or degrees, according to size,
      quality, rank, etc.
      [1913 Webster]

   2. To reduce to a level, or to an evenly progressive ascent,
      as the line of a canal or road.
      [1913 Webster]

   3. (Stock Breeding) To cross with some better breed; to
      improve the blood of.
      [1913 Webster]

The Collaborative International Dictionary of English v.0.48:

Grade \Grade\ (gr[=a]d), n. [F. grade, L. gradus step, pace,
   grade, from gradi to step, go. Cf. Congress, Degree,
   Gradus.]
   1. A step or degree in any series, rank, quality, order;
      relative position or standing; as, grades of military
      rank; crimes of every grade; grades of flour.
      [1913 Webster]

            They also appointed and removed, at their own
            pleasure,
            teachers of every grade.              --Buckle.
      [1913 Webster]

   2. In a railroad or highway:
      (a) The rate of ascent or descent; gradient; deviation
          from a level surface to an inclined plane; -- usually
          stated as so many feet per mile, or as one foot rise
          or fall in so many of horizontal distance; as, a heavy
          grade; a grade of twenty feet per mile, or of 1 in
          264.
      (b) A graded ascending, descending, or level portion of a
          road; a gradient.
          [1913 Webster]

   3. (Stock Breeding) The result of crossing a native stock
      with some better breed. If the crossbreed have more than
      three fourths of the better blood, it is called high
      grade.
      [1913 Webster]

   At grade, on the same level; -- said of the crossing of a
      railroad with another railroad or a highway, when they are
      on the same level at the point of crossing.

   Down grade, a descent, as on a graded railroad.

   Up grade, an ascent, as on a graded railroad.

   Equating for grades. See under Equate.

   Grade crossing, a crossing at grade.
      [1913 Webster]

WordNet (r) 3.0 (2006):

grade
    n 1: a body of students who are taught together; "early morning
         classes are always sleepy" [syn: class, form, grade,
         course]
    2: a relative position or degree of value in a graded group;
       "lumber of the highest grade" [syn: grade, level, tier]
    3: the gradient of a slope or road or other surface; "the road
       had a steep grade"
    4: one-hundredth of a right angle [syn: grad, grade]
    5: a degree of ablaut [syn: grade, gradation]
    6: a number or letter indicating quality (especially of a
       student's performance); "she made good marks in algebra";
       "grade A milk"; "what was your score on your homework?" [syn:
       mark, grade, score]
    7: the height of the ground on which something stands; "the base
       of the tower was below grade" [syn: grade, ground level]
    8: a position on a scale of intensity or amount or quality; "a
       moderate grade of intelligence"; "a high level of care is
       required"; "it is all a matter of degree" [syn: degree,
       grade, level]
    9: a variety of cattle produced by crossbreeding with a superior
       breed
    v 1: assign a rank or rating to; "how would you rank these
         students?"; "The restaurant is rated highly in the food
         guide" [syn: rate, rank, range, order, grade,
         place]
    2: level to the right gradient
    3: assign a grade or rank to, according to one's evaluation;
       "grade tests"; "score the SAT essays"; "mark homework" [syn:
       grade, score, mark]
    4: determine the grade of or assign a grade to