As Webster 1913 puts it
Grime (?), n.
Foul matter; dirt, rubbed in; sullying blackness, deeply ingrained.
Grime is the latest permutation of UK urban music, growing out of UK Garage and (less directly) dancehall, jungle and hip hop. It emerged at the beginning of the decade as producers centred around East London began to drop the melodic, soulful, chart friendly elements from their sound, and concentrate on nasty, dirty, synthetic sounding percussion and sub rattling bass. Divas and soul-boys went out of the window to be replaced by abrasive MC's, who also bucked the trend for americanisms, and flaunted their cockney vowels. Lyrical matter took a shift towards the real, in its desctiptions both of the great british night out, and of the darker side of urban life. Gangsta flavours are definitely back in, including frequent 'diss' tracks: grime revived the tradition of 'clashing' - a musical face off with a rival crew, although the violence is normally (but not always) constrained to the lyrics. The turning-point from UK garage to grime were probably the So Solid Crew, although many grime connoisseurs consider them to be UK garage leftovers rather than grime progenitors.
Growing up well away from the media circus of the west end and being based around a distinctly unwelcoming sound, grime went unnoticed by the mainstream dance press for quite a while, resulting in a fair bit of confusion as to what the style actually was and what it was called. Names like grime, eski, dubstep, sublow and eight-bar floated around - a situation sent up in Wiley's tune 'What U Call It.' By the mid-noughties, though, the media had got a handle on the scene, and the name 'grime' had stuck to the more in-yer-face, 'street', MC oriented tunes, with 'dubstep' referring to an icy, minimal, instrumental variant on the sound. Meanwhile, the scene had spread to outposts in South London, and other big UK cities. In the style of rap groups like Wu Tang, grime tends to be oriented around 'crews' of MC's and producers, who can record either individually or as a colective. The best known of these is Roll Deep, who seem to have featured pretty much everyone in East London at one time or another.
Of the more established subcultures to pick up on grime, the IDM crowd were, unusually, quickest off the mark - the Rephlex and Planet Mu labels both putting out a lot of the dubstep end of things. Other media attention, particularly in America, has focussed on artists like Lady Sovereign and Dizzee Rascal who fit more closely into the hip hop album-artist template - the whole scene is often erroneously identified with UK hip hop by american commentators.
Major grime and dubstep artists include the aforementioned Wiley, Dizzee and Lady Sov, as well as Loefah, Digital Mysticz, Terror Danjah, Kano, D Double E and Lethal Bizzle, among a host of others.