I think the grandparents should get to decide what the they are called and that none of this is really your business. My kids grandpa is called different things by each family. My kids call him Papa (My oldest dubbed him that. I am sure we probably referred to him as grandpa and thats the best she could do. it stuck.) but when BIL started having kids (the only other grandchildren) he wanted his kids to call him papa which necessitated another name for them to call their grandfather. whatever. its not like we had a conference and decided what the grandfather was going to be called now. My kids still call him papa and the boys call him whatever it is they call him.

. The only time I remember discussing this is when I was pregnant with my oldest and one of the other grandchildren was due at the same time. We were talking to grandma and grandpa about "now you are going to be a great grandma" and another cousin (who was only about 8 or 9 at the time I think) looks up and says with all sincerity and confusion and indignant that we missed this very large fact "you have always been a great grandma!" indeed she has which led us to dub her on the spot Grandma GREAT! And I believe all the great grandchildren (of which there about 25 now, a mere 14 years later) call them that.
This is not a choice the parents get to make. If you wanted your kids to all their grandparents something else you should have told them too. But they have their names now (the silly ones) and if everyone is happy why worry about it? and if the other grandma is happy with what your child is calling her then so be it. If she is not it is her job to address it. not yours. its not your name. HOWEVER, i think it is really sweet you went along with the silly names. the grandparents must really like it if they did not change it. I think it is important to honor that.