The ability, "When Grave Maggots is in a graveyard..." will trigger at any time the Maggots are in a graveyard. The game will become an unintentional draw, as each player is hit for millions of damage.
Perhaps the correct phrasing you were searching for is "When Grave Maggots is put into a graveyard from play..."
or
"During your upkeep, if Grave Maggots is in your graveyard, then..."
Second, Grave Maggots is a 1/2 for 6 mana. Unless it's special abilities dominate a game, this is no good.
Looking at it's abilities, you can see that it's effectively an extremely overpriced Thicket Basilisk, only smaller.
First of all, you have to use the BBB ability to gain use from the other ability. So, that means you are heavy black. Second, because the power is 1, 99% of the time when Grave Maggots damages an Undead, that will be because Grave Maggots is blocking an Undead, which means your opponent is confident enough to attack, even given your Maggots.
Third, with a toughness of 2, most creatures that fight the Maggots will kill the Maggots, even if they use thier ability.
Basically, an appropriate mana cost for the Maggots is about 1B. Also, the ability should be "B : Target creature counts as an Undead until end of turn."
