Production of higher-fidelity digital elevation models is important; as such models are indispensable components of space data infrastructure. However, loss of terrain features is a constant problem for grid digital elevation models, although these models have already been defined in such a way that their distinct usage as data sources in terrain modeling processing is prohibited. Therefore, in this study, the novel concept-terrain semanteme is proposed to define local space terrain features, and a new process for generating grid digital elevation models based on this new concept is designed. A prototype system is programmed to test the proposed approach; the results indicate that terrain semanteme can be applied in the process of grid digital elevation model generation, and that usage of this new concept improves the digital elevation model fidelity. Moreover, the terrain semanteme technique can be applied for recovery of distorted digital elevation model regions containing terrain semantemes, with good recovery efficiency indicated by experiments.