A head circumference in the 10th percentile means that out of 100 babies, there are ten babies with a head smaller than your grandson's. A small head circumference can be due to genetics, or health conditions such as microencephaly. The head will be measured at each well baby check up and as long as it continues to grow along the natural curve, then all should be fine. Let me give you an example to help you better understand. My son was in the 60th percentile for weight when he was born. He dropped down to the 40th percentile at his 4 month check up, which was due to a growth spurt. He has consistently stayed within his normal range for weight (around the 50th to 60th percentile)since then. So if genetics played a role in your son's head size, then you could expect his natural head growth curve to be around the 10-20th percentile at each well baby check up.
Since brain issues can play a role in a baby's head circumference, be sure to note all milestones and make sure the baby doesn't have any significant delays. Also, if your grandson's doctor is concerned that there may be a brain issue, a CT or MRI may point out any abnormalities. But if the doctor says the baby is doing just fine, then he is fine. Newborns with head circumferences of <5th percentile is actually a cause of worry.