Grid vs Cluster

There is often some confusion about the difference between grid vs. cluster computing.
The big difference is that a cluster is homogenous while grids can be heterogeneous. The computers that are part of a grid can run different operating systems and have different hardware whereas the cluster computers all have the same hardware and OS.
A grid can make use of spare computing power on a desktop computer while the machines in a cluster are dedicated to work as a single unit and nothing else.
Grid are inherently distributed by its nature over a LAN, metropolitan or WAN. On the other hand, the computers in the cluster are normally contained in a single location or complex.
Another difference lies in the way resources are handled. In case of Cluster, the whole system (all nodes) behave like a single system view and resources are managed by centralized resource manager. In case of Grid, every node is autonomous i.e. it has its own resource manager and behaves like an independent entity.