This is a tough one but you do need to talk to her. My DD was 2.5 when my Mum died and every time we went to see my Dad, she would say things like "that's Grandma's chair your sitting in Mummy" and it was really difficult because my Dad was someone who liked to keep his emotions well under control. Your DD is a little bit older and should be able to understand a bit more - you do need to tell her that her Granddad has died and tell her that you and Nanny are very sad at the moment. Explain to her what sort of comments would not be appropriate around your Mum but also remember that she is a very little girl and will have limited understanding. You don't want to burden or frighten her. Be prepared for her asking when he's coming back, again and again.
A bit different (my boys are 6) but we had planned the holiday of a lifetime to see grandad and nanny. Grandad died 5 days before we flew out. I told them that e had been very ill and that his heart was not strong enough to keep him alive and he died and that it was very sad and that nanny was missing him a lot. We still went on the holiday and they told nanny that grandad was dead. I think it's accepted by the remaining partner that the kids are just verbally working things out. Good luck
My granny is dying and DS (4yo) has been visiting her in her nursing home twice a week since the day he was born.
We haven't told him she is dying although he knows she is a bit poorly. It will be a matter of days and we will tell him then.
I have found that Cruse link really useful, definitely recommend reading all those sections.
Sorry about your dad(?)
And don't worry if she says anything that would seem inappropriate from an adult. She is just a child and needs to have the freedom to express herself however that may be. I know from experience children can really break the tension at heavy times like this.