The Grandmother believes that "good people" are the ones who have "good character". She bases her opinion of the Misfit on the fact that he doesn't look "common", so he must be a "good" man. Her belief that a "good man" is hard to find comes from her own self-righteousness, the belief that she's better than others, her judgmental views, and her selfishness. She lives in the past and thinks it's much harder to find "good" people of "good" character than it was in her time. It isn't until the end that she realizes part of the reason for the Misfit's behavior is because of people like the Grandmother. The title is related to all of the themes of God and religion, violence and cruelty, the lack of a connection among people, and prejudice.
The story's title points directly to the main theme. O'Connor believed that "a good man is hard to find," and therefore we are all in need of grace from God and forgiveness. In the story, all of the characters are terrible, selfish, and prejudice human beings. The only character who shows some positive qualties is the Misfit, and he, of course, is also a serial murderer. O'Connor uses this exposition to establish the theme of human depravity and the need for grace for all of us.