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What is Grace?

The ‘short and meaty definition’ of grace, I believe, is this one I found somewhere:

Grace is unconditional acceptance [by God] given to an undeserving person [the sinner] by an unobligated giver [God] (Emphasis mine).
This short-on-word-but-long-meaning definition has three parts; unconditional acceptance, the undeserving person, and the unobligated giver.
Romans 5:8, “But God commendeth his love toward us, in that, while we were yet sinners, Christ died for us.” God’s love for us is not conditional. Like I will accept you if you make this standard, no. Because “while we were yet sinners”—He took us in no matter our badness.
This unconditional acceptance comes to an undeserving people. We are sinners. We are bad people. We do the nastiest things that can be done under the son—we are undeserving considering that God is holy—this however does not stop His acceptance of us. Our underserving nature makes claim solid for God’s unconditional acceptance.
We have to notice that God is under no obligation to accept us—He is God. But he does. This is the grace we are talking about. It’s the love of God to us (which we never return anyway!). “For God so loved the world.” This is God’s so great love.
That we are accepted unconditionally in our badness by a God who is under no obligation to accept us but then goes ahead to accept us anyway!

Shall We Go on Sinning, so that Grace may Increase?

After preaching grace to a youth group, one posed a question, “You said grace is God’s unconditional acceptance to a sinner who is undeserving,

and does that mean we should go on sinning because God’s acceptance of us is unconditional?”

In Romans 6:2, Paul provides the answer: “By no means! We dies to sin how can we live in it any longer?” He continues to explain:

Know ye not, that so many of us as were baptized into Jesus Christ were baptized into his death?  Therefore we are buried with him by baptism into death: that like as Christ was raised up from the dead by the glory of the Father, even so we also should walk in newness of life. 
For if we have been planted together in the likeness of his death, we shall be also in the likeness of his resurrection: Knowing this, that our old man is crucified with him, that the body of sin might be destroyed, that henceforth we should not serve sin.(Romans 6:3-6, KJV).

When we start living by grace, it’s a new life we have altogether. A better life—better than the one before—therefore we are not expected to go back to old ‘sinning at free will’ and being slaves to the sinful nature, rather slaves to righteousness.
Because Christ died to sin, we died to it as well and we live for God.

Am not saying that under grace, we don’t sin, no! We do sin and we are great sinners at that. We need grace every day, every hour, every minute, every second—that is how passionately sinful we are. But what Paul is saying is that sin should not be our master—and hold us captive—as its slaves.

Rather we should be slaves to righteousness. Obeying God, instead of obeying the sinful nature. Because continuous and intended sinning does not show the presence of too much grace in us but too little or absence grace instead.
Life by grace is Christ-centered life. Our master in this life is God, not sin:

For sin shall not have dominion over you: for ye are not under the law, but under grace (Romans 6:14, KJV).

Therefore, grace is not a free license to sin, but instead a free license to righteousness through obedience to God.