In 1914 he graduated from the Ludovika Royal Military Academy in Budapest as a Lieutenant and participated in the First World War as a platoon and company commander on the eastern front.

Taking up a general staff position in the aviation section of the Defense Ministry in January 1941, he became Chief of the Air Force Organization Bureau on 1 March 1941.

[2] Hungary had joined the Axis powers on 20 November 1940 by signing the Tripartite Pact, and participated in the invasions of Yugoslavia and the Soviet Union in the spring of 1941.

In August of 1941, Grassy left his general staff post and was given command of the 15th Royal Hungarian Infantry Brigade, which would be redesignated the 15th Light Division on 17 February 1942.

In January 1942, in an ostensible anti-partisan operation, Grassy directed the arrest of over 7,000 people in Bačka, that part of Yugoslavia annexed by Hungary.

In an operation that lasted several days, victims were machine-gunned to death and, by some accounts, were made to walk out on the frozen Danube river which was then shelled with artillery, resulting in mass drownings.

Sent to Budapest following the occupation of Hungary by German forces, he was involved in the deportation of Hungarian Jews that was organized by Adolf Eichmann.

In October 1944, he led the staff charged with forming the 25th Waffen Grenadier Division of the SS Hunyadi (1st Hungarian) and became its commander on 27 November 1944.