Grace is the Power of God that powers the Gospel; which is the Power of God unto Salvation. What would the Gospel of Jesus Christ be without Jesus? If Atheists are right, and Jesus is dead; the Gospel is Powerless, and we're to be most Pitied. Who knows where the Spirit comes from and where he goes during Regeneration; if there is no presence of the Holy Spirit, the Gospel is Powerless. One man Sows the Gospel, another Waters it; but God gives the growth. If God doesn't "GIVE" it the growth; the Gospel is Powerless. If the birds carry away the Gospel, what Power was in that Gospel Presentation without God's Grace behind it?
Not only is Grace the Unmerited Favor of God, its God's Riches At Christ's Expense; it's a positive outpouring of what we need from God. Grace is God Working; God Works in us to Will and do his Good pleasure. God's Riches at Christ's "Exertion". God's Work is him going above and beyond his Favor. Grace is his Expenditure. God Graciously Favored us before he Graciously Worked on the Cross...
In a sense, Grace comes to us in the Positive and the Negative. Unmerited Favor comes to us in the Negative; for no reason we know of. But God's Riches come to us in the Positive; as a Gift. Grace pre-Faith, and Grace post-Faith. I suppose it's this differentiation that your OP is about. The answer is that Grace is both God's decision to Save us, and his efforts to Save us...
What are the Steps? In my Gospel Tract titled "The Salvation Equation", I rounded it down to Grace + Faith - Works = Salvation. Anything else that can be said to be required, fits into this Equation somewhere. For instance; the Perseverance of the Saints is a Doctrine of Grace, and fits in the Grace Integer. Christ Alone fits into Grace, etc. Since I'm a Fundamentalist, and a Lowest Common Denominator kind of guy (a Minimalist); I like to keep things simple...
Works can't be subtracted from the Gospel (1), from grace (2), from faith (3), or from salvation (4).
(1) In Matthew 4:15-23, Jesus began his ministry with the Gospel message to repent for the Kingdom of God is at hand, which was a light to the Gentiles, and God's law was how his audience knew what sin is (Romans 3:20), so repenting from our disobedience to it is a central part of the Gospel message. Likewise, in Romans 15:18-19, Paul's Gospel involved bringing Gentiles to obedience in word and in deed. Moreover, Romans 10:16, 2 Thessalonians 1:8, and 1 Peter 4:17 all speak against those who do not obey the Gospel. In Titus 2:14, Jesus gave himself to redeem us form all lawlessness and to purify for himself a people of his own possession who are zealous for doing good works, so becoming zealous for doing good works in obedience to God's law is the way to believe in what Jesus accomplished through his ministry and through the cross (Acts 21:20).
(2) In Psalms 119:29-30, he wanted to put false ways far from him, for God to be gracious to him by teaching him to obey His law, and he chose the way of faithfulness by setting God's law before him, so this has always been the one and only way of salvation by grace through faith. In Exodus 33:13, Moses wanted God to be gracious to him by teaching to walk in His way that he might know Him and Israel too, in 1 Kings 2:1-3, God taught how to walk in His way through his law, and in John 17:3, eternal life is knowing God and Jesus, which again is the only way of salvation by grace through faith. In Genesis 6:8-9, Noah found grace in the eyes of God, he was a righteous man, and he walked with God, so God was gracious to him by teaching him how to walk in His way in obedience to His law and he was righteous because he obeyed through faith. In Romans 1:5, we have received grace in order to bring about the obedience of faith. In Titus 2:11-14, our salvation is described as being trained by grace to do what is godly, righteous, and good, and to renounce doing what is ungodly, so God graciously training us to do these works is itself part of the content of His gift of salvation.
(3) Obedience to any set of instructions is about putting our faith in the one who gave them to us to rightly guide us, which is why Jesus said in Matthew 23:23 that faith is one of the weightier matters of the law. In Romans 3:31, our faith upholds God's law. In James 2:18, he would show his faith by his works. In Revelation 14:12, those who kept faith in Jesus are the same as those who kept God's commandments. In John 3:36 obeying Jesus is equated with having faith in him. In Hebrews 11, every example of faith is an example of works. In Numbers 5:6, disobedience to God's law is referred to as breaking faith. in Hebrews 3:18-19, unbelief is equated with disobedience. God is trustworthy, therefore His law is also trustworthy (Psalms 19:7), so relying on what God has instructed is the way to have faith in God while it is contradictory for someone to think that we should have faith in God, but not in what He has instructed. In Proverbs 3:5-7, we have a choice of whether we are going to lean on our own understanding of right and wrong by doing what is right in our own eyes or whether we are going to trust God with all of our heart by doing what He has instructed, and He will make our way straight, and this is what it means to have faith.
(4) Our salvation is from sin (Matthew 1:21) and sin is the transgression of God's law (1 John 3:4), so while we do not earn our salvation as the result of having first obeyed it, living in obedience to it is intrinsically part of the concept of salvation from not living in obedience to it. According to Titus 2:11-14, we do not earn our salvation as the result of having first done those works and we do not do those works as the result of having first been saved, but rather God graciously teaching us to do those works is itself the content of His gift of saving us from not doing those works.