Grating interferometry is a crucial technology in precision nanometrology, valued for its high resolution, robustness, and adaptability for multi-axis measurement systems. It is essential in advanced semiconductor manufacturing and ultra-precision machine tools. This review first compares grating interferometry with laser interferometry and time grating, detailing their applications and performance. It then explains the two main principles: homodyne and heterodyne grating interferometry. The review also analyzes global development trends, highlighting key manufacturers and advancements in achieving nanometric to sub-nanometric precision in single and multi-axis systems. In addition, it examines error sources, classifications, and compensation methods in grating interferometry. Finally, it discusses the current state and future prospects of grating interferometers, offering insights for developing and optimizing measurement systems based on this technology.