I have two definitions for it. A personal Grail is the pin/s you want the most. I usually refer to these more as "Top Wants", unless you get to the point where your Top Wants are also truly Grails, too (according to the second definition).
The second definition, for me, is a very, VERY hard to get pin, that you really, REALLY want. It's usually a combination of rarity, supply/demand issues, and expense. My remaining grails are things like the DA Art Nouveau pins. For some people, the Alice Bottle pin is a grail because of how hard it is to find. A lot of my Grails are Grails because they only show up on eBay once every 3-4 years.
The community used to have a small segment of pins referred to as Grails, because they tended to be the grails for everyone. Things like the Carousels, Mickey for President, the Raven, etc. I don't think it's used that broadly anymore, though, because the number of pins that could refer to has grown so great that we could be talking about any number of 100 pins, now, instead of 20 or so.