The grit (stones) go into the gizzard and are used to grind the chickens feed into a digestible size before it enters the stomach for digestion. The grit is slowly worn/ground away by this action. It does exit the body through the birds droppings but is small enough to be undetectable or it is absorbed as usable minerals.
Quote:
Think about it like having a handfull of small stones in your closed hand and rolling them around grinding into each other,eventually they with grind away to sand. Will