What does it mean when a CSS rule is grayed out in Chrome's element inspector?

For me the current answers didn't explain the issue fully enough, so I am adding this answer which hopefully might be useful to others.

Greyed/dimmed out text, can mean either

1. it's a default rule/property the browser applies, which includes defaulted short-hand properties.
2. It involves inheritance which is a bit more complicated.

Inheritance

Note: Chrome dev tools "style" panel will display a rule set, because one or more rules from the set are being applied to the currently selected DOM node. I guess, for the sake of completeness, dev tools shows all the rules from that set, whether they are applied or not.

In the case where a rule is applied to the currently selected element due to inheritance (i.e. the rule was applied to an ancestor, and the selected element inherited it), chrome will again display the entire ruleset.

The rules which are applied to the currently selected element appear in normal text.

If a rule exists in that set but is not applied because it's a non-inheritable property (e.g. background color), it will appear as greyed/dimmed text.

here is an article that give a good explanation - (Note: the relevant item is at the bottom of the article - figure 21 - unfortunately the relevant section doesn't have a heading) -http://commandlinefanatic.com/cgi-bin/showarticle.cgi?article=art033

Excerpt from the article

This [inheritance scenario] can occasionally create a bit of confusion, because defaulted short-hand properties; figure 21 illustrates the defaulted short-hand properties of the font property along with the non-inherited properties. Just be aware of the context that you're looking at when examining elements.

It means that the rule has been inherited, but is not applicable to the selected element:

http://code.google.com/chrome/devtools/docs/elements-styles.html#computed_style

The pane contains only properties from rules that are directly applicable to the selected element. In order to additionally display inherited properties, enable the Show inherited checkbox. Such properties will be displayed in a dimmed font.

Live example: inspect the element containing the text "Hello, world!"

div { 
  margin: 0;
}

div#foo { 
  margin-top: 10px; 
}

<div id="foo">Hello, world!</div>

Michael Coleman has the right answer. I just want to add a simple image to go along with it. The link that he included has this simple example: http://commandlinefanatic.com/art033ex4.html

The HTML/DOM looks like this...

The Styles Pane in Chrome looks like this when you select the p element...

As you can see, the p element inherits from its ancestors (the divs). So why is the style background-color: blue grayed out? Because it's part of a rule-set that has at least one style that is inheritable. That inheritable style is text-indent: 1em

background-color:blue is not inheritable but it's part of the rule-set that contains text-indent: 1em which is inhertiable and the developers of Chrome wanted to be complete when displaying rule-sets. However, to distinguish between styles in the rule-set that are inheritable from styles that are not, the styles that are not inhertable are grayed out.