Grignard reagents, or organomagnesium halides (R-Mg-X), were discovered by a french chemist named François Auguste Victor Grignard (usually known as Victor Grignard). Grignard was working for his doctoral degree at Lyon and was trying to find a process for methylation when he discovered this process of organomagnesium halides. He submitted this project for his thesis in 1901. In 1909, he took charge of the Department of Organic Chemistry at Nancy, and in 1910 he became the Professor of Organic Chemistry there. He was awarded the Nobel Prize in 1912 for his work (along with Paul Sartier for his work in Nickel-catalyzed hydrogenation).

Production and Reactions of Grignard reagents
The production of Grignard reagents by the addition of an alkyl halide, R-X, to magnesium, is almost always carried out in an ether solvent, which solvates and stabilizes the Grignard reagent as it forms. Grignard reagents are represented by R-Mg-X, with R a carbon chain, Mg magnesium, and X a halide, either iodine, bromine, or chlorine. The Grignard reagent can then react with carbonyl compounds to produce alcohols. If even the slightest bit of water is present in the process, it will ruin the reagent because it is so reactive with "active" hydrogens (i.e. OH, NH). Grinard reagents react with C=O, S=O, C=N, N=O, and C≡N bonds.

A summary of reactions of Grignard reagents to produce alcohols
Under the reaction conditions of first ether solvent (with absolutely no water), and then H3O+, the following reactants produce these respective alcohols when combined with Grignard reagants, R-Mg-X:

H                                  H
 \                                 |
  C==O                           R-C-OH
 /                                 |
H                                  H 
formaldehyde     -->    primary alcohol

R' R' \ | C==O R-C-OH / | H H aldehyde --> secondary alcohol

R' R' \ | C==O R-C-OH / | R" R" ketone --> tertiary alcohol

R' R \ | C==O R'-C-OH / | R"-O R ester --> tertiary alcohol, two Grignard R groups added

R' R \ | C==O R'-C-OH / | Cl R acid chloride --> tertiary alcohol, two Grignard R groups added

O / \ R-CH2-CH2-OH CH2-CH2 ethylene oxide --> primary alcohol, two carbons between Grignard R group and -OH group

So what if water is present in the reaction?
If water is present, the Grignard reagent will react vigorously and irreversibly with the hydrogen. This method reduces an alkyl halide to an alkane:

R-MgX + H2O --> R-H (alkane) + XMgOH 

Organic Chemistry, L.G. Wade, Jr., Pearson Education, Inc., Fifth Edition