The Grotto is the hardest of the completely random dungeons in the game. The boss and monster populations are randomly generated, and everything has vastly increased combat strength. Grimm's Grotto is the closest dungeon equivalent to ranked mode from the alpha. Although technically listed as a normal-difficulty scenario, Grimm's Grotto is often regarded as equivalent to most hard-difficulty dungeons. However, since it only has a single boss that is chosen randomly its difficulty is going to be very random.
Grimm's Grotto uses a different monster placement algorithm than other dungeons. While most dungeons will weight the placement of low-level monsters towards the player's start location and high-level monsters away from it, Grimm's Grotto places them randomly. This means it has a significantly higher probability of creating unwinnable layouts of any dungeon. According to the developers, this is an intentional throwback to the alpha.
Due to the randomized boss, it is difficult to approach Grimm's Grotto with an overly-specialized strategy. Instead, it is better to prepare yourself to deal with a wide variety of different bosses. Your most important goal is to find ways to navigate around monsters that are blocking your path to avoid getting cut off. The ENDISWAL, WEYTWUT and PISORF glyphs all work very well for this purpose, as does the Bear Mace preparation.