What does 'grace' mean in the context of salvation?

In the context of salvation, grace signifies God's unearned favor towards humanity, extending the gift of eternal life through faith in Jesus Christ. Ephesians 2:8-9 makes it clear that we are saved by grace through faith and that this is a gift from God, emphasizing that no human effort or works can contribute to salvation. This principle establishes the foundation of sovereign grace theology, which asserts that God elects individuals to salvation by His grace alone, bypassing any merit or choice on their part. Grace then becomes essential in understanding that salvation is God's initiative and work, showcasing His mercy in redeeming undeserving sinners.