Have always been able to keep at a distance from them until dd arrived.
So you've never wanted to be around them.
Dh in his own words "can't be bothered with them" and has put off calling them because we can never do anything right so why try.
Sounds like he's caught between a rock and a hard place - the rock being them, and the hard place being you.
She lists our faults and moans about me keeping the baby to myself when they visit, 'she always takes her off to feed or change whenever we get close'.
But that's true isn't it ? You've admitted you don't like them holding her. That would be upsetting for them I imagine.
Dh refuses to let me talk to her and eventually gets her off the phone. I'm furious and shaking with rage at this point
That makes you sound a bit nuts to be honest.
I tell him I'm texting mil to say this is unacceptable and he tells me not to be mean so I agree to call her instead.
That makes you sound even more nuts. What on earth has MIL done wrong at this point? If you annoyed me should I phone to shout at your husband?
Mil tells me she is sorry and she told gmil not to call us, I state that I can't accept that behavior and will not have dd around it.
So GMIL phoned because MIL is upset at feeling kept at arm's length from her DS and her GDD, (which she is, by your own admission) and your response to this is to say that if they are going to complain about it then they won't see GDD at all.
Okaaay........
Mil then tells me that she isn't welcome in our home and she feels ill after visiting us,
I'm not surprised really, it sounds like you make them feel extremely unwelcome and uncomfortable
having her round is like a royal visit and dh waits on her hand a foot, she's the one who refuses to take off her coat.
This is very telling. You resent her being there, and any attention she gets from your DH while she's there, and she feels that so acutely that she doesn't take her coat off. It's a shield of protection between you and her, and a way of acknowledging that she isn't going to be there for long.
And how on earth does he manage to 'wait on her hand and foot' when you never invite them to stay long enough to eat a meal and she leaves her coat on? 
we live relatively simply, we buy enough to feed our small family of 3, not an army
I have family members like this, and they also not coincidentally are the types who get very stressed at the thought of having other people in their house, and are very controlling. They invite people very rarely, and when they do it's out of a sense of duty - they'd really rather not. The result is that everyone feels like they are walking on eggshells and the food on offer always makes you feel like you've turned up unannounced and are bleeding them dry. It's not nice. It gives the impression that they resent you being there. And it's in stark contrast to how things are when they visit us.
We've fallen into an attachment style of parenting and don't play pass the baby for the sake of it.
Hmmm. And she cries every time you hand her over to her Grandma? Maybe you should knock the 'attachment parenting' on the head then. It sounds rubbish.
come on, this is about you not your daughter.
I snap and tell her dh has recently only spoken to her when handed the ringing phone.
That was nice of you, to dump him in it with his mother when you were in need of a bit of ammunition. 
I've said I want nothing to do with gmil or mil until they both apologize and do not want dd anywhere near either of them until such a time.
FFS. Using your child as a bargaining tool now? So let me get this right - they are upset at lack of contact with the baby, they dare to voice their concerns, you flip your lid and the the result is that they are now not allowed to see the baby until they apologise for expressing their desire to be see the baby.
Well done, you've got this all sewn up haven't you? And you call the GMIL manipulative?
I needed to protect and defend my family.
Against what, exactly? That makes you sound a bit nuts again. All they want to do is be able to see their DS and their GDD. It's hardly an unreasonable request.
Gmil is the one at fault here and mil has received the brunt of my rage,
er yes......... so why is the bulk of this post all about how she has upset you and how she should apologise?
I know things won't ever be the same but I think I'm okay with that
Of course you are. In fact I imagine you are delighted at the prospect. Job done. DH and DD all to yourself.
Look, I know I am being harsh, and we only have one side of the story here - if you don't like them then you don't like them. That's your prerogative. If you say they are toxic and awful I'll believe you. But there is nothing in this thread that makes me think they've been any more difficult to get along with than you and I think you sound a bit frosty and highly strung and very controlling, to be honest. You all sound as bad as each other. I feel a bit sorry for your DH.