What Is Grace and Why Do We Need Discipline?

I'll admit it...... I googled the word grace to see what it had as a definition.  One of its definitions (according to google) is: the free and unmerited favor of God, as manifested in the salvation of sinners and the bestowal of blessings.  According to Wikipedia the definition of grace in Christianity is: the love and mercy given to us by God because God desires us to have it, not because of anything we have done to earn it.
What does all that mean?  I'm really trying to understand grace, to figure out what it really means.
Then, there's the issue of discipline.  What is discipline?  Again, back to google.  I didn't really get a clear answer on this one.  I came up with a way of training your child to have self-control and to make the right choice.
Amazingly, the two go hand in hand!  A lot of times we can think of grace as a free pass, a get off the hook, or a second chance without the consequence.  But, I think true grace doesn't mean that we don't discipline our child.  Without discipline we'd all go down a wrong path.  I believe discipline is God's way of bringing us back to Him.  And, of course, He does it in love.
In one of Andy Stanley's messages, he stated: "God is generous with His grace, and thorough in His discipline."  Grace says that I forgive you and I love you.  Discipline says I love you enough to not keep letting you walk down the path that you are on.
Grace and discipline should happen together.  When my children are doing something wrong, I want them to know that I love them and that is why there is discipline.  Discipline doesn't have to be harsh.  Discipline with grace brings change.  It brings your child back to you instead of driving them away.  Discipline with grace teaches your child that you're not afraid to address the wrong, but that you haven't stopped loving her.  Discipline does not have to produce fear.  It can be a way of teaching or instructing your child.  With grace we continue in relationship with our child and produce more trust.
Oh, how I pray that I can discipline my child with grace.  I want to teach them and instruct them in what is right and what is wrong.  But, I want to extend grace!  I want to always remember to measure out discipline in love with the intention of restoring the relationship.