It seems package rxvt is required, however the rxvt package has been removed from Buildroot (according to a one-liner in the CHANGELIST). Buildroot build completes and doesn't return an error. However, when attempting to run grub, grub returns: #grub Probing device to guess BIOS drives. This may take a long time. Error opening terminal: rxvt.
It very likely instead related to a dependency on rxvt, it would make no sense for grub to depend on rxvt. The problem must be a might more complicated than that, I'd say.
The error was not related to Buildroot. When grub is linked with ncurses, it uses the TERM environment variable to know which terminal type to use. In your case, the TERM environment variable was set to rxvt, so it was trying to use one. But you can set TERM to 'vt220' or to 'linux', and grub will not require rxvt.