  We consider fine G-gradings on M_n(C) (i.e. gradings of the matrix algebra
over the complex numbers where each component is 1 dimensional). Groups which
provide such a grading are known to be solvable. We consider the T-ideal of
G-graded identities and show that it is generated by a special type of binomial
identities which we call elementary. In particular we show that the ideal of
graded identities is finitely generated as a T-ideal. Next, given such grading
we construct a universal algebra U_{G,c} in two different ways: one by means of
polynomial identities and the other one by means of a generic two-cocycle (this
parallels the classical constructions in the non-graded case). We show that a
suitable central localization of U_{G,c} is Azumaya over its center and
moreover, its homomorphic images are precisely the G-graded forms of M_n(C).
Finally, we consider the ring of central quotients Q(U_{G,c}) (this is an
F-central simple algebra where F=Frac(Z) and Z is the center of of U_{G,c}).
Using an earlier results of the authors (see E. Aljadeff, D. Haile and M.
Natapov, Projective bases of division algebras and groups of central type,
Israel J. Math.146 (2005) 317-335 and M. Natapov arXiv:0710.5468v1 [math.RA])
we show that this is a division algebra for a very explicit (and short) family
of nilpotent groups. As a consequence, for groups G such that Q(U_{G,c}) is not
a division algebra, one can find a non identity polynomial p(x_{i,g}) such that
p(x_{i,g})^r is a graded identity for some integer r. We illustrate this
phenomenon with a fine G-grading of M_6(C) where G is a semidirect product of
S_3 and C_6.
