To remove the gridded default texture, do the following:

1. Click on the Terrain Tab, select Texture

2. Click on the link under material, this will open up the material applied to the terrain texture within Material Editor.

3. Click on the ... button in the material's diffuse slot.

4.Navigate to Game > Textures > Defaults, select grey.dds.

5. Click on the diffuse colour

6. And Slide the arrow down to make the terrain less bright.