Well, since she already knows about GD and "thinks you're insane" then it's not a matter of her not knowing. Or maybe she doesn't know it is "GD" and just the weird way you do things that she has simply seen you do?
Anyhow, if she knows, then the only thing you can do is tell her that yelling at your dd is not acceptable, nor is grabbing. I would simply say: "When we were over and you were yelling no over and over and grabbed dd's face--that wasn't okay with us." You will then get her reaction... Good luck. But stick to: "You may think x, y, and z but we disagree, we are the parents, and that is not okay." I would not try to convince her to agree with your reasons because that will be a useless distraction. Don't play if she tries to convince you either.
If she really doesn't know your intentions then you need to have a conversation with her in which you do describe what you do and why. And maybe be ready to say clearly to her that while you could be wrong, it's still your own choice or mistake to make. Tell her to wait twenty years and then she can say "I told you so" but for now she needs to leave you to work it out your way.
I think it is also important to let you dad know where you stand and how that is said depends upon the history of the relationship. He may also be a good go-between. You could tell him you very sensitive for dd's sake to yelling and that it is very important to you to always be gentle--and he could pass that along.
I would restrict visiting without babyproofing. I've been there. I might plan for visits involving 1/2 hour or less because that is all I could endure with a toddler. Because I would personally have to follow my child around, distracting and carrying and ... and no one else would have a chance to be the one intervening except me or dh. If that is where she stands on babyproofing then you might say you will wait until dd is older so she can relax and enjoy herself in their house. It's her house, yes, but she should make you as visitors comfortable. I only feel comfortable visiting where the normal activities of children are acceptable and welcome. It's your time and your child and you have a right to some relaxed enjoyment if you are going to make time to visit them. You could also suggest outings where you are in neutral child-friendly territory like going to the zoo or similar
After several incidents have occurred, we now have minimal relationships with family who are rough with their kids and have been rough toward ours. Part of this was with my mom's husband who used very loud threats against my special needs child. In order to be a reasonably centered mama I ultimately need to spend time with people with whom I can be myself and who can be themselves with me. If you explain what you expect and are treated with disrespect that is a bad sign. I can't handle much of any relationships in which I am openly disrespected about things that are deeply important to me. A debate is one thing but anything said that is against my right to make decisions and not be undermined is not okay. I value family connection, but not enough for what we were experiencing while connected. I don't at all think you should ditch your dad and his wife, but I do think that you should not hesitate to create distance if the relationship seems toxic over time.
I wish you the very best in finding a solution that helps with the least stress possible.