I would strongly suggest that you change the data type of your column in the database to boolean/bit. Storing it as a string is inefficient and causes the problem you experience because when the column value is evaluated to true/false it will treat 0 as false and anything else as 1/true, and technically each character is represented by an integer (ASCII) value. In ASCII the letter N=78 and Y=89, so when the cell trieds to convert the value to a boolean, it will always return true.

Your other option is that you manually set the checkbox value for each row in the InitializeRow event by checking if the value is N or Y. There might be a way to map N to false and Y to true for the grid column so that it happends automatically, but I am not sure. I really recommend that you change the column type in your database. The data in the database should always be stored in the most efficient way possible and not in a way that makes it easily readable for a person.