It Depends™, and different parties use the term differently, including at least "probably stolen", "probably counterfeit", "genuine but broken and fixed unofficially", and "genuine but vendor only acknowledges original buyers or mountains of cash". Some sellers like "grey market" because they want ambiguity that their goods might not be stolen, and some vendors (cough, Cisco) like the label to pretend there's something wrong with any hardware lacking a current, fully paid-up support contract.
But as a manufacturer, we have to get regulatory compliance for our products from the countries we sell to.
Yes, this is a Big and Expensive deal.
Of course, a grey marketer can physically ship our products from one regulatory regime to another without our permission.
So a countries regulatory authority finds our product for sale in their country and it doesn't comply with the regulations.... what recourse do they have?
The most common one is confiscation from the sellers.
But if the problem is sufficiently widespread, they may choose to put pressure on the manufacturer.... do something about this or we will block the sale of your goods in our country.
In this case "grey market importers" and moving product into countries under global sanction. Not fully committing to sanctions on countries like North Korea both prolongs the suffering of the people on the ground and fails to meet the goals of the sanction itself.
The sanctions are not against the country, are against the people. That's why for some countries there is a specific list of people which are sanctioned.
