Rachel,

"Grade" refers to rise/run, that is vertical distance
change over horizontal distance change. Thus a 100% grade is not vertical, but a 45 degree slope. [The term is most often used for milder slopes, and usually rather approximately, so one can use it for some time without worrying about whether it's
rise/run
or
rise/diagonal_distance.
But it's the first one.]

So a grade of 18% rises or falls 18 feet in 100 horizontal feet, 9 yards in 50 horizontal yards, 900 meters in 5 horizontal kilometers, etc.
Good Hunting!

-RD