Alfred Augustus Grace was the youngest of 12 children of Agnes Fearon and her husband, Thomas Samuel Grace, a Church Missionary Society missionary who lived among the Māori of the Taupō region. Although Alfred was born in Auckland in May 1867 after the land wars had forced the family to leave Taupō, like his brothers and sisters he came to know the Māori people and their culture well. Unlike his elder brothers, however, he was educated in England. He travelled there in 1875 with his parents and studied at St John's College, Hurstpierpoint, Sussex, on a scholarship. While in England in 1884 his family was visited by Patara Te Tuhi and the Māori King, Tāwhiao, causing something of a scandal among the neighbours. Grace commented: 'It seems that, in their opinion, it was not respectable to entertain savage-looking people with carved faces.' This event was the basis of one of his later short stories, 'The King's ngerengere.'
In 1887 Grace returned to New Zealand, took up residence in Nelson (where other family members were living), and began to write. He appears to have taught for a while; on his marriage to Amelia Adelaide Harriet Jennings at Christ Church, Nelson, on 30 December 1890, he described himself as a schoolmaster. The couple were to have four children.
A. A. Grace played a prominent part in local affairs. He joined H Battery, New Zealand Regiment of Field Artillery Volunteers, as lieutenant in 1902 and attained the rank of lieutenant colonel of the Canterbury Field Artillery Brigade before retiring in 1917. He was also for a time secretary of the State Control League of New Zealand, and a member of the committee of the Nelson branch of the Navy League. In 1905 he was the highest-polling candidate elected to the Nelson City Council and served for six years. He was a past master of the Lodge Victory of Freemasons.
However, it was as a writer and journalist that he achieved national recognition. He produced articles and short stories for Australasian periodicals, including the Bulletin, the Triad and the New Zealand Illustrated Magazine, and subsequently published collections of short stories: Maoriland stories (1895), Tales of a dying race (1901), and Hone Tiki dialogues (1910). His first novel, Atareta, the belle of the kainga appeared in 1908 and was followed in 1914 by The tale of Timber Town. In addition he wrote substantial historical and topical works, including New Zealand in the next great war (1894), Folk tales of the Māori (1907), a guide book to Nelson and district (1910) and a jubilee history of Nelson City Council (1924).
Grace's fascination with Māori subjects is not surprising in view of his family background. His father had progressive views on Māori autonomy and a genuine concern for their welfare. Of his brothers, Thomas continued his father's missionary work among the Māori, William was regarded as one of the best scholars of Māori of his generation, and Lawrence was an interpreter for the House of Representatives. Both Lawrence and John Edward married Ngāti Tūwharetoa women of rank.
What is curious, given these close ties, is Grace's treatment of the Māori in his fictional writing. Many of his stories take a nostalgic view of an attractive but doomed people, whose loss to the world would be sad but not tragic, since they would merely be yielding to the inevitable advance of civilisation. A patronising attitude pervades the tales: often Grace belittles his Māori characters by mocking their speech. This is apparent in the Hone Tiki dialogues, where Hone's crude Māori-English makes him seem ridiculous to the reader and therefore renders his criticisms of Pākehā relatively harmless.
This book nevertheless hooks some quite sharp barbs into Pākehā ways. When Māori are accused of laziness and procrastination (taihoa), Hone retorts that when it comes to official matters 't'e taihoa belonga t'e Pakeha.' It is hard to identify Grace's own attitude here, as it is in the stories which have as their theme the confrontation of a wily, cunning tohunga and a shallow opportunistic missionary. In such encounters neither character comes off particularly well, and while the defeat of Māori gods by the Christian deity is viewed as inevitable, the power of the new religion is deemed great but not entirely beneficent.
It has been suggested that Grace preferred to write about Māori because he saw Pākehā society as conventional and self-righteous. Certainly this idea emerges in the story 'Pirihira', where the healthy cheerfulness of Māori is contrasted with the puritan humourlessness of a Pākehā woman. It is also possible that he found it easier and more acceptable to deal with some themes – for instance sex – in this genre. A review of Tales of a dying race referred to this obliquely: 'His stories possess that warmth of colour and feeling which is sometimes considered to be too strong for the constitution of young persons of our nationality'. Whenever his characters exhibit relative sexual frankness they are always Māori. 'The chief's daughter', published in Maoriland stories, illustrates the point. The Englishman, Craig, is pursued by a young Māori woman, Hinerau, but remains passive in the face of her passion. She is thrashed 'all over her naked body' by an elderly Māori woman, but continues her pursuit of Craig through thick and thin until 'he buries his face in his hands, and a great sob breaks from him. He is beaten; the girl has won'.
A. A. Grace achieved a measure of success: his second collection of stories, published in London, sold well, having 'taken a firm hold upon the British book-buyers'. The popularity of Grace's stories in New Zealand and Australia suggests that his benevolent but paternalistic views found ready acceptance in colonial minds. In his Māori stories he set a literary fashion that was followed by other New Zealand writers, and his mastery of the form was summed up in a review in the New Zealand Free Lance magazine: 'Very few in New Zealand can express the humorous and whimsical side of the Māori character so aptly and so pleasantly.' By 1914, however, he had begun to turn away from his depictions of Māori, and after his last novel, based on the Maungatapu murders, he wrote no more major works of fiction. Grace was predeceased by a daughter in 1922 and his wife in 1938. He died in Nelson on 18 March 1942.