We present an incremental algorithm for constructing and reconstructing Generalized Voronoi Diagrams (GVDs) on grids. Our algorithm, Dynamic Brushfire, uses techniques from the path planning community to efficiently update GVDs when the underlying environment changes or when new information concerning the environment is received. Dynamic Brushfire is an order of magnitude more efficient than current approaches. In this paper we present the algorithm, compare it to current approaches on several experimental domains involving both simulated and real data, and demonstrate its usefulness for multirobot path planning.