The present invention provides a method of grid generation that uses the geometry of the problem space and the governing relations to generate a grid. The method can generate a grid with minimized discretization errors, and with minimal user interaction. The method of the present invention comprises assigning grid cell locations so that, when the governing relations are discretized using the grid, at least some of the discretization errors are substantially zero. Conventional grid generation is driven by the problem space geometry; grid generation according to the present invention is driven by problem space geometry and by governing relations. The present invention accordingly can provide two significant benefits: more efficient and accurate modeling since discretization errors are minimized, and reduced cost grid generation since less human interaction is required.