The word grace has different connotations in Scripture. It may refer merely to an attribute, a perception, a virtue of God: God is gracious in Himself, apart from any relation which He sustains toward us.
Grace may also denote a disposition and attitude of God towards the creature, and then it signifies favor. And when this favor is revealed to those who are themselves unworthy of it, who have forfeited it through sin, it stands in opposition to works. It is, of course, this aspect of grace which is revealed in salvation, particularly God’s justifying the ungodly in Christ and thus reconciling us to Himself. (for by grace ye have been saved)
The term grace also is used in Scripture to denote that power and divine operation upon us and within us whereby we are actually delivered from the dominion of sin and death, whereby we are liberated from sin’s slavery, changed from guilty children of darkness into righteous and living children of the light, operating upon us from the God of our salvation through Jesus Christ our Lord. Christ is our salvation and that all the spiritual blessings of salvation which we need to become and to remain children of God, redeemed, delivered, sanctified and glorified are in Him.
I did a series of post awhile back about our vital union and found in this same chapter 4 HH directing my thoughts there again. It is of Grace that we are united to Christ:
When we are so united with Christ, and He by His Spirit lives in us, we respond. We hunger and thirst, we long and pray, we come and embrace Him, we eat the bread of life and are satisfied, we drink the water of life and thirst nevermore, we draw from Him Who is the fulness of all the blessings of salvation, even grace for grace. All this is the fruit and manifestation in us of that marvelous, mysterious, blessed wonder of grace, of grace sovereign and free, whereby we are united with Christ. For by grace are ye saved, through faith, and that not of yourselves: it is the gift of God.