I really don't think there's a right or wrong way to deal with this. It's whatever everyone is comfortable.
I have a dear friend with a stepdaughter, she was under 3 when he married her mom. She used to call him by his name, but (she's 16 now) I've noticed she now calls him "dad" sometimes too. She refers to her biological father as "my real dad" to distinguish between them. "My dad" and "my real dad" -- though of course her 'stepdad' is more "real" in many ways to her...
When I was 12, my grandparents divorced and my grandfather married his mistress (yes, he had a long-term mistress...) We call her "Aunt Viv". In this case, we thought it would be disrespectful to our grandmother, who had been so badly hurt by all this, to call her any kind of 'grandmother'. But at the same time, we like Viv, she was part of the family now (and they're still happily married, as awful as it was at the time, they did get it right, it seems), so we had to call her SOMETHING, so "Aunt" it was.
When I divorced DS's father and remarried, DS was almost 4. He just calls DH by his given name. He's still very attached to his father, that's always 'dad', though he will call DH "my stepdad" when say, introducing him to his friends. His father just got married a couple weeks ago -- so he now has a stepmom as well, who he also just calls by her name.
Now DH's parents, that was trickier, and that's exactly what you're talking about. They even asked us what we wanted them to be called. We talked about it freely, pros and cons of different options, with them and with DS (he was about 8 when this came up, he hadn't really met them much before then). We all settled on just their regular names -- no grammy or grampy or aunt or uncle.
They treat him like any of their other grandchildren (they're extraordinarily generous at Christmas for instance lol...) but it didn't feel
right for any of us to call them grammy and grampy in regards to my son. If it feels right in your case, then do so. Obviously from this thread it's a very common usage.