The drawing "limits" as defined by AutoCAD is a rectangular area in which you are allowed to draw. This is the area which will be displayed when you "zoom" "all." It is also the area in which the visible grid and snap grid are extended to. They are preset by Autodesk as an area 12" wide and 9" high. To set limits follow these steps
Click Format menu Drawing Limits.
Enter the coordinates for a point at the lower-left corner of the grid limits.
Enter the coordinates for a point at the upper-right corner of the grid limits.
At the Command prompt, enter griddisplay, and enter a value of 0.Once you have set the limits for a drawing, make sure you save the drawing file so that the limits are set. You can also follow these steps
Open an acad.dwt template or any template that you are planning to work with. (Make sure Dynamic Input is turned ON)
Now you can actually enable LIMITS in many ways.
a) Open Limits from AutoCAD Application Menu > Drawing Utilities > Limits
Type Limits from the command prompt to enable LIMITS
Reset Model space limits:
Specify lower left corner or [ON/OFF] <0.0000,0.0000>:
Specify upper right corner <420.0000,297.0000>: