An electro-dynamic model of soil has been developed that takes into account the frequency dependent and nonlinear soil parameters. Its primary aim is to examine and validate different engineering return stroke models during discharge, but it can successfully be used for examining and calculation of the grounding. The model accounts for surge behaviour in soils with a wide range of conductivities. The use of the new model for studies at high lightning currents reveals that a great change in the grounding concept can be expected compared to what was previously established in many studies. It is shown that the concept of soil impedance is not applicable in cases of nonlinear resistance and capacitance of the grounding. The same holds for the current reflection coefficient. The new model can be applied when the wavelength of each component in the channel-base current frequency spectrum is much greater than its skin depth in the soil. For most soils the new model is applicable up to 10 MHz. It shows that the channel-base current and the grounding characteristics are related and cannot be treated independently. In other words, the current pulse in any particular return stroke, even in the same flash, „sees“ its own grounding impedance depending on its frequency content and current magnitude.