Grid cells in the medial entorhinal cortex (MEC) respond when an animal occupies a periodic lattice of 'grid fields' in the environment. The grids are organized in modules with spatial periods, or scales, clustered around discrete values separated on average by ratios in the range 1.4-1.7. We propose a mechanism that produces this modular structure through dynamical self-organization in the MEC. In attractor network models of grid formation, the grid scale of a single module is set by the distance of recurrent inhibition between neurons. We show that the MEC forms a hierarchy of discrete modules if a smooth increase in inhibition distance along its dorso-ventral axis is accompanied by excitatory interactions along this axis. Moreover, constant scale ratios between successive modules arise through geometric relationships between triangular grids and have values that fall within the observed range. We discuss how interactions required by our model might be tested experimentally.