For MySQL 5.1.14 and later, the mysql database is not replicated. The mysql database is instead seen as a node specific database. Row-based replication is not supported on this table. Instead, statements that would normally update this information (including GRANT, REVOKE and the manipulation of triggers, stored routines/procedures, and views) are all replicated to slaves using Statement based replication.

For MySQL 5.1.13 and earlier, user privileges are replicated only if the mysql database is replicated. That is, the GRANT, REVOKE, SET PASSWORD, CREATE USER, and DROP USER statements take effect on the slave only if the replication setup includes the mysql database.

If you're replicating all databases, but don't want statements that affect user privileges to be replicated, set up the slave to not replicate the mysql database, using the --replicate-wild-ignore-table=mysql.% option. The slave will recognize that issuing privilege-related SQL statements won't have an effect, and thus not execute those statements.