Return word before a matched word using sed

You could run sed without -i and step through output with less

grep -rl --null term1 . | xargs -0 sed -e 's/term1/term2/' | less

Then run sed with -i.bak to create backups which you can diff afterwards

grep -rl --null term1 . | xargs -0 sed -i.bak -e 's/term1/term2/'
diff somefile.bak somefile
# verify changes were correct

Edit: As suggested in comment, use grep --null | xargs -0. This causes filenames to be terminated by the null-byte, which makes it safe for filenames with unusual characters like newline. Yes, \n is a valid character in a unix filename. The only forbidden characters are slash / and the nul character \0

Here are two commands. If you want a command that trims up to the last .*{$ line in a sequence (as @don_crissti does with ed) you can do:

sed 'H;/{$/h;/^}/x;/{\n.*PATTERN/!d'

...which works by appending every line to Hold space following a \newline character, overwriting hold space for every line that matches {$, and swapping ing hold and pattern spaces for every line that matches ^} - and thereby flushing its buffer.

It only prints lines which match a { then a \newline and then PATTERN at some point - and that only ever happens immediately following a buffer swap.

It elides any lines in a series of {$ matches to the last in the sequence, but you can get all of those inclusive like:

sed '/PATTERN.*\n/p;//g;/{$/,/^}/H;//x;D'

What it does is swap pattern and hold spaces for every ...{$.*^}.* sequence, appends all lines within the sequence to Hold space following a \newline character, and Deletes up to the first occurring \newline character in pattern space for every line cycle before starting again with what remains.

Of course, the only time it ever gets \newline in pattern space is when an input line matches ^} - the end of your range - and so when it reruns the script on any other occasion it just pulls in the next input line per usual.

When PATTERN is found in the same pattern space as a \newline, though, it prints the lot before overwriting it with ^} again (so it can end the range and flush the buffer).

Given this input file (thanks don):

sometext1{
string1
}

sometext2{
PATTERN
string3
}

sometext3{
string4
string5
string6
}

Header{
sometext4{
some string

string unknown

here's PATTERN and PATTERN again
and PATTERN too
another string here
}
}

The first prints:

sometext2{
PATTERN
string3
}
sometext4{
some string

string unknown

here's PATTERN and PATTERN again
and PATTERN too
another string here
}

...and the second...

sometext2{
PATTERN
string3
}
Header{
sometext4{
some string

string unknown

here's PATTERN and PATTERN again
and PATTERN too
another string here
}