Grover and all the other Sesame characters are Muppets - even Sesame Workshop calls them that to this day. Sesame Workshop is legally allowed to call the Muppets and they are Muppets....Grover is a puppet, but a special kind of puppet, a Muppet (always has been, always will be - not only in the eyes of the fans, but legally speaking too.) They are Muppets.
Sesame Workshop owns the Sesame Muppets (and calls them Muppets), and Disney owns "The Muppets", (I think the Jim Henson Co. can even still use the term Muppets on certin things too - like Fraggles, ect.) - it's a tricky term that has been split up between companies, but not taken over by just one.