Yes it has to be grandparents.
basically one of your parents must be an Irish citizen at the time of your birth.
so someone born in Ireland is an Irish citizen. Their children are all also citizens, because their parent is.
if that child is born outside Ireland, they are still a citizen, so their children are eligible.
however, if your parent was not born in Ireland, you must apply to to the foreign birth register to gain citizenship.
once you have gained citizenship then your children are also eligible, but again must register with foreign births to become a citizen.
so great grandparents born on Ireland- citizen
their children born outside Ireland - grandparents- citizen
their children- parent, born to Irish citizens, who were not born in Ireland. Must register foreign birth to gain citizenship.
you* child. If your parent was on FBR before you are born then you are the child of an Irish citizen born outside Ireland. So you need to register as a foreign birth.
if your parents were born to an Irish citizen not born in Ireland, but did NOT register with Foreign births, they were not Irish citizens at the time of your birth and therefore you are not able to claim Irish citizenship.