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In all highway driving at 60mph, if all is well, that generation Grand Cherokee with a 4.0 I6 should get 20 - 24 mpg with no wind and no very steep hills. If it's not, and you can't get 13 - 14 city, something is definitely wrong.
I'd look into making sure wheel bearings are all good, tire pressures are about 2 psi higher up front than in back (if it's full time 4wd), make sure the front O2 sensor (or sensors, some have 1, some 2, depending on year and CA emissions) are good. Make sure the plugs are good and gapped correctly as well. Not a bad idea to change the fuel filter either, as some have reported a clogged one killing both power and mpg on those Jeeps.
From what I've seen with my mom's 99, the onboard mpg gauge (in avg eco mode) is usually within 1mpg of hand-calculated tank average.
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Call me crazy, but I actually try for mpg with this Jeep:
Typical driving: Back in Rochester for school, driving is 60 - 70% city
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