The 22-year-old has been the tip to win ever since the very first show this year.
In her first audition, Grace wowed the judges with an original song and she's continued to perform self-penned tracks throughout the series.
Tonight sees the live shows begin and Grace will once again be showing an original song.
On being the favourite, Grace said it felt "Wonderful but also really daunting."
However Grace added: "I tend to ignore it because if you think you’ve got this in the bag you stop trying.
"You have to go with the attitude that you won’t get through."
The X Factor has its final 12 contestants and is ready for the live shows.
According to the odds, the Girls and the Groups are the strongest category as they occupy the top five in the betting.
Behind Grace, Holly Tandy is the new second favourite having shortened into 7/2 from 11/2.
Rak-Su are the strongest of the groups as the lie third in the betting at 4/1 after their odds were slashed from 9/1.
Wicklow brothers, Sean and Conor Price have suffered a drift ahead of the live shows as they are eased out to 7/1 from 5/1. The CutKelvins are next at 12/1 from 16/1 to win.
Aoife Heffron, Spokeswoman for BoyleSports commented “Grace Davies has been the long running favourite, but after the final 12 have been revealed, she has drifted for the first time, hinting that there could be a new favourite to win soon.”
She added “Sean and Conor Price have made the live shows, but the Blessington duo has lost out on their second favourite status as they drift out to 7/1 from 5/1, their largest odds to date.”
The X Factor 2017 airs live this Saturday and Sunday night on ITV.