Let's say police think a crime occurred. They report it to the D.A.'s office for prosecution. The D.A. looks at the police reports and what evidence they have. If the D.A. thinks there is a strong enough case, they will move forward.
To move forward, the D.A. must establish probable cause. There are two ways to establish probable cause, a Preliminary Hearing, held before a judge, or a Grand Jury. Sometimes they can only use one, sometimes they can choose which to use.
Probable cause is essentially that there is enough evidence to support that further investigation could produce enough evidence to allow a reasonable person to believe that the defendant committed the crime.
In a preliminary hearing, the D.A. puts officers on a witness stand, and sometimes other witnesses. The defense attorney can ask them questions. At the end the judge determines whether there is probable cause or not.
A grand jury is simply a group of people who hear the same testimony from officers or witnesses and makes the same determination, whether there is probable cause or not.
One major difference is that in a preliminary hearing you have a right to counsel, you do not have a right to counsel in a grand jury hearing. You actually don't even have to be informed there is a grand jury hearing going on about you. You could literally have a grand jury discussing your activity right now and you would only hear about it if they find that there is probable cause to believe you did whatever crime you are being charged with.
A grand jury is convened by the local prosecuting authority. It is chosen just like a regular jury, only there is a much larger pool initially.
In my county, around 400 people were summoned for jury duty and told when they got there that they were being screened for a grand jury.
The D.A. asked them questions to determine their ability to serve as jurors. The grand jury meets every other week for several hours. They will all serve on the grand jury for about six months, at which point a new grand jury will be impaneled.
When they meet, the D.A. presents a case, and the grand jury votes on whether or not they believe there is probable cause to go forward. Then the D.A. presents another case, and the grand jury votes again. They will go through several cases each time they meet.
You do not need any special qualifications to sit on a grand jury other than what you need to sit on a regular jury.
Some jurisdictions do not have grand juries, some only have grand juries.