Well, it means the charm would need an ilvl of 110. The only monster with high enough mlvl to drop such a charm would be dclone (ubers too?), but as we all know, they don't have random drops, thus can not drop magical grand charms.
In theory, it could spawn, but there is no way, since no monster can drop it.
It's not the item level which has to be 110, but the affix level. It's ilvl might theoretically be 110, but during the affix level calculation, the alvl (which will be 110 in the process of the calculation because GCs have a base qlvl of 1) gets reduced to 99.