I think you need to change your orgOptions to include nforceOptions to tell nforce (which Skuid-Grunt) uses to connect to Salesforce) that you’re connecting to a Sandbox org:

var orgOptions = {
   ‘clientId’: ‘demoCliId’,
   ‘clientSecret’: ‘demoCliSec’,
   ‘username’: ‘demoUsrnm’,
   ‘password’: ‘demoPasswd’,
   ‘nforceOptions’: {
      ‘environment’: ‘sandbox’
   }
};

In addition to Zach’s comment, see this list of avaliable nforceOptions: https://github.com/kevinohara80/nforce#createconnectionopts

Along the same lines, I am receiving the Auth error as well… I have a custom domain sandbox.  In the nforceOptions samples it seems to specify 

environment: ‘production’, // optional, salesforce ‘sandbox’ or ‘production’, production default

Is there a way to override the environment for a specific domain path.  i.e.   mysite.csXX.my.salesforce.com

Thanks!

Never mind…  Just need to look a little closer… 

 loginUri  is used.