Part of the fun of any game is mastery, and repeating a lot of similar challenges helps achieve that. In racing games, for example, you run multiple races around the same track while you try to win, beat lap times and other players.
Grinding, on the other hand, is repetition with little variation or challenge over hundreds of identical encounters. It dispenses with mastery and simply insists that the player should keep cranking the same handle over and over.
Grinding is thus a form of busywork.
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