How does one become a grandmaster or a master? This has been debated in depth on forums, so this is essentially a synopsis. There is no single consensus or single answer.
First, one can evolve into the role. This was described to me as “family style” by Sijo John Wong, my late Tai Chi teacher, head and founder of the Wu Shing Tai Chi Academy. He called it family style because it is based on the organic model of family growth. One teaches, which is like being a parent. When one’s student becomes a teacher, that is like being a grandparent, and would be recognized as “master” or “master teacher.” When one’s student becomes a master in turn, one then achieves grandmaster status.
One can also be recognized by one’s peers, either those already of grandmaster status acknowledging one as an equal, or by other masters recognizing one has elevated oneself to another level. While one can be recognized as a master based on singular skill as a fighter, it seems to me that grandmastership in martial arts is generally tied to lineage, though the second criteria in the previous sentence might allow skill alone. In chess, for example, grandmasters are recognized solely by ability to win.
Someone like Angel Cabales gained recognition through both of these channels, devoting a lifetime to both teaching and perfecting his own skills.
Another route might be “family style” in which one inherits the title based on blood relation to the previous head of the system. Some well known examples of this type of succession in recent times include: Yip Chun in Wing Chun, Kissimaru Ueshiba in Aikido, Lily and Gini Lau in Eagle Claw (parallel, competitive successorships) and Vincent Cabales in Serrada Escrima. Historically this has had mixed results. Some lineages have remained strong through successive generations while others have seen the title inherited by name rather than accomplishment.
Next, there are grandmasters based on self-perception. This might occur when, in the previous example, there is a superior student who is passed over as head of a style for a blood descendant of lesser abilities. In such a case, the student may opt to go out on his own and found his own lineage. Whether or not such this is justified may vary according to the needs of one versus that of the larger organization; battles have been fought over such things. Sometimes it is necessary for the prodigal son to move on, whereas other times it might have been better to work from within. It depends on how various personalities get along at such junctures.
Finally, there are those who proclaim themselves grandmasters based completely on egoic self-aggrandizement. In other words, someone who is qualified neither by skill nor by being groomed for successorship, but is merely fueled by excessive desire for recognition. It is unfortunate that martial arts attracts a certain element who need to feel fulfilled in this way, particularly as the public might be conned by words and flashy uniforms. Reality often has a way of catching up to such individuals, in the form of a better fighter who decides to test the skills of this unknown grandmaster.
However one arrives at such an elevated status, it would seem there are a couple of basic, incontrovertible requirements. First, one should have deep understanding and mastery of the fundamentals of the style one practices, whether or not one is the premier fighter in the system. Secondly, one should have a broader perspective of what this rank entails. Essentially, the title lays claim to a fiefdom, which means having responsibility not just to oneself but also to those who look up to the position. Like parenthood, it means raising up of those who follow along the path. If a grandmaster does not do this, he will sit atop a tree that dies and the title he has worn will pass into oblivion.