"this exercise was undertaken in another department. There a manager had left so one worker was upgraded to manager and the other one went up two grades after writing her own job description"
Sounds positive!
"Firstly, I was not aware we were following any grading format. Secondly, I feel that my employer should already have a detailed of my job description based on what they ask me to do every day...…"
Well ideally, yes, but presumably if they did already have one, you would know and would have seen it, and they would at least be giving you that as a starting point. So it seems fair to assume they don't currently have a detailed one which is why they are asking you to write about what you do.
"Where do I stand on this? I have the distinct feeling we are about to be thrown under the bus and possibly down graded." Why do you think that? You say yourself that elsewhere in the organisation where people have been asked to do this, they've been upgraded as a result!
"Am I able to demand to see the management's and board's criteria for each grade?"
I wouldn't "demand" anything. But if you were unaware your organisation was using any kind of formal grading system, I would suggest you ask for information about the system and about the criteria for grading, yes, so you can see what's what. Ask your manager, as well as asking him/her for details of what format they would like you to use.
Being invited to write your own job description for the purposes of regrading is a brilliant opportunity. Obviously it will need to be approved, but doing this gives you the opportunity to make sure all your responsibilities are taken into account when assessing your grade.