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First, start the charcoal in the grill. (See note on using propane grills later.)

While the charcoal is getting ready, clean and thoroughly dry the Dutch oven or other cast iron ware. If cleaning by boiling water in it (recommended), simply pour the water out, dry it with a cloth and let it sit a spell. It will retain the heat and any residual water should evaporate.

Next, coat the surfaces of the Dutch oven with cooking oil, like liquid Crisco or similar. Any good vegetable cooking oil (corn, canola, etc.) will do. Avoid olive oil. Coat ALL the surfaces, including the lid. (Coat the inside and outside, top and bottom - ALL surfaces.)

When the charcoal is ready, place the Dutch oven UPSIDE DOWN on the grill. Now place the lid, right side up, on top of the inverted Dutch oven, i.e. on top of the legs of the oven. This positioning will allow any excess oil to drain away instead of being left in the bottom of the oven or on the underside of the lid.

Cover the grill and let it the oven "cook" till the coals are out or almost out. Remove the oven and (caution: it may still be fairly hot), put the lid on and set it aside where it can cool slowly. If you can leave the oven on the grill till the coals are completely out and everything returns to room temperature, that is even better. (Always let your Dutch oven cool slowly - never douse a hot oven with water!)
Following the above simple procedure will result in a thoroughly seasoned oven every time, with a minimum of fuss.

By the way, although I prefer using a charcoal grill, you can also use a propane fired grill instead. Just get it up to a minimum 400 degrees (425 is recommended), put in the Dutch oven and keep the heat on (i.e. maintain the temperature) for an hour or so, then, without opening the grill, turn the fire off and let everything cool slowly. I like the charcoal grill method, because I don't have to worry about possibly forgetting to turn of the grill. Less fuss and almost foolproof. Always remember to place cooking surfaces so they can drain, for example a skillet should be upside down.