I have the answer!

The reason a terrain doesn't work is when it is anything other than a plane. I took the road as separate piece of mesh and combined it with the plane as the landscape and made it into one piece/prop. If it's anything other than a plane with lumps or not, it messes with the terrain function.
So I made prop1 landscape and the road as a separate prop, problem solved.
 

I have had the same issue lately, trees are planted kilometers above ground, no idea why

Ya got me! I have noticed, when planting trees, that it isn't always as accurate as I would like. But not sure about your situation..Hopefully someone much smarted than me will weigh in!    It shouldn't harm anything though...



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That was a premature celebration.
Right click on prop>Convert to Terrain
Unchecked: Use Bounding Mesh
Then I started gardening and as seen here the grass is under the terrain. 
What am I doing wrong?

Cool!;)


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I just forgot that it's right click on the prop >Convert to Terrain helping me out brought it all back. Thanks for that.

Here have a free desktop on me:

As you did ... make that ground object a Terrain then be sure to turn off "Use Bounding Mesh" under the Modify tab for that object.
As well If you're using and old Mesh Medium terrain be sure to turn off "Use Bounding Mesh". That should get you there.



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I got a scene with the ground has lots of hills and valleys. But the grass just get planted at z=0.
I selected the ground save it as a terrain that didn't work as it didn't save anything.
So how do you tell the grass where to land? or How to I prep the ground for grass to land on it?