The concept of grammar compression basically didn't exist at the time RePair was published, but it is by all means a grammar compressor (same goes for LZ78). I

The concept of grammar compression basically didn't exist at the time RePair was published, but it is by all means a grammar compressor (same goes for LZ78). If you are interested in learning what a grammar should look like (which is very different from optimizing the number of rules) you may want to look into stochastic grammars http://en.wikipedia.org/wiki/Stochastic_grammar http://en.wikipedia.org/wiki/Stochastic_grammar.