grade inflation is when the majority of students get As or Bs etc. It schould be that most get Cs, but some top school professors feel that since their students are so spectacular and there work is so grand they all deserve As. I think the avg gpa at most tippy top schools is around 3.5... a good way to check if its inflated is to look at the avg gpa if you can find it, but an easier way is to look at the cut offs for cum laude, magna cum laude, summa cum laude... id say my school is considered more to be deflated as our avg gpa is 2.9 and the cut offs are 3.4, 3.6, and 3.8 respectively.
its not just top tier schools (but is more specifically targeted at top 10 schools), crappy schools have grade inflation also, its just a recent trend, university's dont want to give their paying customers bad grades.