Step 1: Concept
Grignard reagents ($RMgX$) are organometallic compounds.
Step 2: Meaning
They are formed by reacting an alkyl/aryl halide with Magnesium metal.
Step 3: Analysis
Dry ether is used as a solvent to stabilize the Grignard reagent and prevent reaction with moisture.
Step 4: Conclusion
Hence, the correct answer is Mg, dry ether.
Final Answer: (C)