My daughter and niece and nephew call my mom Me-ma, my dad papa, and my step mom granny. My daughter calls my husbands parents grandma and grandpa. It's nice because she doesn't get confused with a million grandmas.
You can pick whatever name you want for grandparents, but the child usually comes up with their own names. The only one that has stuck that we picked out is my stepmom wanted to be called nini. It is easy enough for my little girl to say. But grandma and Grammy haven't stuck. We have ammi and dama.
You can always tell her that you don't think it's ok for children to call adults by their first names. But your child is going to call her by whatever name she can say first.
My mother in laws name is Van and she likes being called Nanna Vanna or just Nanna (i have a 6 yr old niece who started calling her that) and my father in law gets called papa. My own mother has passed away but if she were alive we would have had her called Glam-ma because my mom was always very glamorous never looked her age and never went any where without her hair done or make up on. And im not sure what my dad will be called
My son and neice call my mom Grammy and I call my grandma nanna
My kids all my mom Nena, but they call all their other grandmothers Mamaw (then their first name).