According to Wikipedia, this is how it works:
Nomination process
Record companies and individuals may submit recordings to be nominated. Nominations are made online and a physical copy of the work is sent to the National Academy of Recording Arts and Sciences. Once a work is entered, reviewing sessions are held, by more than 150 experts from the recording industry, to determine whether the work is eligible and entered in the correct category for official nomination.
The resulting list is circulated to all NARAS members, each of whom may vote to nominate in the general field (Record of the Year, Album of the Year, Song of the Year, and Best New Artist) and in no more than nine out of 30 other fields on their ballots. The five recordings that earn the most votes in each category become the nominees. There may be more than five nominees if there is a tie in the nomination process.
Whereas members of the Academy of Motion Picture Arts and Sciences are generally invited to screenings or are sent DVDs of movies nominated for Oscars, NARAS members do not receive nominated recordings.
After nominees have been determined, final voting ballots are sent to Recording Academy members, who may then vote in the general fields and in no more than eight of the 30 fields. NARAS members are encouraged, but not required, to vote only in their fields of expertise. Ballots are tabulated secretly by the major independent accounting firm Deloitte Touche Tohmatsu.[9] Following the tabulation of votes the winners are announced at the Grammy Awards. The recording with the most votes in a category wins and it is possible to have a tie. Winners are presented with the Grammy Award and those who do not win are given a medal for their nomination.
In both voting rounds, Academy members are required to vote based upon quality alone, and not to be influenced by sales, chart performance, personal friendships, regional preferences or company loyalty. The acceptance of gifts is prohibited. Members are urged to vote in a manner that preserves the integrity of the academy.
The eligibility period for the 2012 Grammy Awards is September 1, 2010 to September 30, 2011.