Translation:It is a dog.
그 개 is just "that dog" almost like you're pointing at it or just identifying it while 그것은 개 means "that dog" for the beginning of a sentence so you can expect some sort of description about "that dog". 그=that 것=thing 은=topic particle 개=dog. Sorry for the long explanation but hope it helps
I believe the 은/는 denotes the topic, so we're saying "as for that, it is a dog", if we did 그 재자 it means "as for that dog, ..."
The word 그것은 is saying that is a, but when you just say 그, it cuts off part of the word. Idk how to explain it...sorry if that doesn't help...
I am surprised Duolingo is translating 그것 as "that". I would tend to say it was "this" since it denotes something close to both listener and speaker. Granted, even in English we use "this"and "that" pretty much interchangeably when referring to something close by, and rely on context to provide distinction to the listener. But then again, we don't have special markers that distinguish between close, far, and very far ....