Gray and grey are two spellings of the same noun, adjective, or verb. The spelling depends on the type of English.
In American English, you use “gray,” so gray area is correct.
In British English, you use “grey,” so grey area is correct.
Gray area or grey area refers to a difficult (moral) dilemma or a situation with unknown rules.
It’s important to choose one spelling and use it consistently. The QuillBot Grammar Checker can help you with this..