Figuring is not an exact science, it's all in the eyes of the grader, the most important thing the grader should have is consistency.
The grade mainly refers to the strength of the figuring, i.e. the visually stronger the flame/quilt/crotch etc. the higher the grade.
There are also other aspects to take into account though, such as the quality of the wood, the uniform pattern of the figure, the defects etc...but for most purposes the higher the grade will mean the stronger figure.
hope that helps
wwood