So BIL has two kids and they call MIL Grandma. MIL mentioned once that she had wished to be called Granny but wasn't able to change it now.
Now we have a DD, and we asked all the grandparents what they would like to be called and she pretty much said the same thing but we said if you want to be called Granny that's what we'll call you. MIL was very happy with this. Her mum was Grandma and I think she associates it with her and wanted something for her own but this is probably also why BIL automatically felt comfortable calling MIL Grandma.
Now DD is 1 and starting to play with language and attempt such words. BIL has now said we cannot call MIL Granny because his DC (now 4 and 5) know her as Grandma and it would b confusing. But they all live in Canada and the likelihood of us all being in one place for a prolonged period of time is pretty, well, unlikely. Neither family can afford all the plane tickets for one so it probably won't be until they are older that.
AIBU to keep calling MIL Granny? DH agrees that she should be called what she wants to be called and it's not an issue having 2 names. I mean I can be both mummy and Beryl.
Also I don't like it when someone tells me not to do something so I am being stubborn too.