Grandmaster is one of the highest titles awarded by the World governing body (for Chess), FIDE.
While it could be argued that a greater honor is to be crowned World Champion, the difference between the two is that the World Championship is contested regularly and can only be held by one player at a time ...
Whereas, once awarded, the GM keeps that title for life - forever more, they will be professionally recognized in the Chess community with the GM prefix before their name.
GM Title Origins
The 19th Century Sporting Chronicle, "Bell's Life" is said to be the first time that GMs have been referred to in relation to Chess, in an issue brought out in 1838. Although, that was apparently an unofficial mention.
It wasn't until a tournament in Ostend, during 1907, that the GM term was used in competition.
Meanwhile, the 1912 San Sebastian Chess tournament was heralded as an event for G.randmasters.
Formal use of the term is said to be during the 1950s, when FIDE awarded the title to 27 players.
How To Become GM
Throughout the decades since it was first, formally recognized, there have been a handful of revisions of the regulations, to try and improve the quality of Grandmasters holding that title.
Modern regulations, which can be found in the FIDE Handbook, require a player to have an Elo Rating of at least 2500, at one point during their playing career.
An extra criteria requires players to have two favourable results in tournaments against other G.randmasters (including some from other countries).
GM Title Inflation
Just like money can be seen to be weakened by inflation - caused by too much money in circulation - an influx of qualifying Grandmasters is said to be devaluing the title, somewhat.
As of August 2009, there have been 1328 players who have been awarded the GM title.
To address the issue of Inflation, there have been calls - notably by English GM, Nigel Short - to scrap the title altogether.
While, another offered solution is to create a new title, with only the cream of the crop becoming "Super-G.randmasters".