When connecting to MySQL, even everything seems in place, but still get the message: 'Error: Could not connect to the database'. However, I am able to connect, retrieve and display data from MySql using normal PDO.
You are missing mysqli extension for PHP. As of PHP 5.5, mysql_* extension is deprecated in favor of mysqli extension. It's required for phpGrid to work. The old mysql extension is deprecated by MySQL team. In phpinfo, check wether there's an entry for mysqli. If not, you don't have mysqli extension installed or enabled for PHP.
Further, phpGrid does not use PDO for database access. It uses ADOdb. We found it is a lot more superior and portable.