How to talk about deceased relatives to toddlers

[Sew3stitch]

My mum died when I was 18 so my children have never met her. My dad remarried and his wife is lovely with my kids and she's known as Grandma.

We have a photo of my parents in their younger years up in the house and my daughter (aged 2) has started to point at it and say mummy. I'm quietly very happy that I look so like my mum that my daughter mixes us up but in response I've only gone as far as explaining that's my mummy and Grandad.

It's hard to know how much to explain to her given her age, even down to what to call my mum as I never thought as a teen to ask her whether she'd be a Grandma, Nana etc. I want to share how wonderful my mum was with my children but not complicate her relationship with my step-mother who treats all her grandchildren the same, blood relatives or not.

If anyone has any experience of similar circumstances or advice I would be very grateful!

I am the grandchild in a similar situation. I grew up knowing I had a Granda Bob (mums dad who died) and a Granda Jim (mums stepdad). I always knew about Granda Bob but probably didn't understand until I was 6/7. But he was talked about and pointed out in photos and I know all about him, I even look a bit like him!
I adore my Granda Jim and won't let anyone detract from our relationship as he's fabulous.
I imagine at this age it's just about getting her used to hearing about Grandma X as she's too young to understand the conplexity of family relationships.
Pick a name for your mum and use it to talk to your daughter about her . Sorry for you loss

Thanks @Starshapeddreams that's really helpful.

I think it's important not to avoid it or try to distract from the topic- the more honest the better :)

My mum died 4 years before I had DD. I've no dad or step parents so not quite the same.
Ever since DD (& now DS) was little I've shown her the photos of my mum & told her who she is, that she got poorly & died before DD was born.
I was matter of fact about it. It's brought up many questions from DD over the years (she's 5 now), including if I miss her & some tears from DD as I've had to explain death to her. But I think she's better prepared for it. Especially as she has some great grandparents who will likely pass in the not too distant future.
Be truthful, answer questions honestly, show emotion if you want & keep the memory alive.

I've got no idea how my daughter will react to talking about death but being open and honest / factual is the best plan generally in life. Comments so far are in agreement to follow the same approach here so will definitely do that. Thanks everyone