The Simple grid type does not use this method of creating the grid so prefabs are ignored.

The prefabs are the cells to be used if they are filled. If they are not, the grid will still run, but just leave the cell without a physical object in it. If Auto Cell Blocking is on, this again will still run without prefabs, and cells will still be marked as taken, but without anything physical to represent it.

Grid cell prefab

Places a selected prefab in any cell that is not marked full at runtime.

Second grid cell prefab

If the Grid Type is set to Checkered a second prefab is used to create the pattern.

Block above cell prefab

If Auto Cell Blocking is on, places this prefab on any cell that is not placeable above the grid. If the grid is blocked by rocks or mountains, this would place this prefab around them to create a border.

Blocked below cell prefab

If Auto Cell Blocking is on, places this prefab on any cell that is not placeable below the grid. If there is a cliff face or a drop to a body of water, this would place the prefab there. In most cases, this would be left clear.