Grenade sniping is the skill of shooting live grenades with a Sniper Rifle or Beam Rifle, causing them to explode prematurely. Given the difficulty of the act, the term can also be used to refer to the premature detonation of thrown grenades via the use of other projectiles, such as those fired by a Battle rifle.
In the event that a player cannot avoid a grenade, they can shoot the grenade before it reaches them, lessening the damage they take or avoiding damage entirely. A player can also damage an enemy by throwing a Frag Grenade near it and shooting it. It can also be used to wound an attacker, by shooting the grenade as they throw it. The trick is extremely difficult, however, due to a grenade's small size and the limited time frame that the would-be grenade sniper has to aim.
The trick can be done with any grenade, though Frag Grenades tend to be more "solid", and Spike Grenades are larger.