You're an expat if you live in a country other than the one in which you were born and raised. Some expats are sent by their companies to work in foreign countries.
If your grandparents retire and buy a house in Mexico near the beach, they're expats. The word is a shortened form of expatriate, and it generally refers to anyone who has chosen to live away from their native home country, either temporarily or permanently. Expatriate comes from the Latin roots ex-, "away from," and patria, "one's native country." It first meant "one who is banished," and later "one who chooses to live abroad."