In the event someone else stumbles across this thread… To quote a Reddit thread (linked):
World Partition Grid Size: This determines the granularity of the landscape chunks, or proxies, that get streamed in and out. For instance, if you set the grid size to “2”, then your landscape will be divided into chunks where each chunk consists of 2x2 components. When the player moves around the world, these chunks (or proxies) get loaded/unloaded based on their proximity to the player.
World Partition Region Size: Regions are a higher-level organization structure in World Partition. While the Grid Size divides your landscape into smaller chunks, the Region Size groups these chunks into larger clusters.
The reason for having regions is to further optimize the streaming system. Instead of dealing with a huge number of individual chunks, the engine can handle a smaller number of regions, which each contain several chunks.
For better visualization, imagine a checkerboard. Each square on the checkerboard is a landscape component. If you have a “grid size” of 2, then every 2x2 block of squares is a streaming proxy. If you have a “region size” of 4, then every 4x4 block of these 2x2 proxies is a region.
Some helpful reference links:
https://www.reddit.com/r/unrealengine/comments/17err0b/world_partition_grid_size_and_region_size_question/
https://www.reddit.com/r/unrealengine/comments/18tbpzd/how_to_determine_a_performant_world_partition/