I vote Daisy or Gigi

My grandmother was Margey, said with a hard G, like gutter.

Gigi

As a parent of a Margaret, I recommend...Margaret.

Seriously, it's a beautiful name. If she picks up a nickname along the way, so be it, but why not just use her given name?

Mari, pronounced MAR (rhymes with far)-ee

I am biased as a Margaret who goes by Peggy, but your DH's pick of Marge/Margie is the worst on the entire list IMO.

I like Maggie, Meg, Maisie and Daisy (yes, it is a traditional nickname for Margaret) better than any of the others.

One of my best friends is also a Margaret whom we occasionally call Mags, but it's more of a casual nickname just among a couple of old friends - it's not the kind of nickname which she would ask her teachers to call her in class, if that makes sense.

You could also use Megan or Gretchen.

Love Margaret!!! Maisie is my favorite nick name for Margaret.

Mae

My friend's daughter's name is Margaret. Initially she went by Maggie or Daisy, but by age three it was Daisy all the time. She's now 10 and still going strong with Daisy.

I like Maggie better.

That is an incredibly long list of nicknames. I do not think making up a new one is the answer to your problem. Even if you make up a nickname, she is going to get called one of these nicknames, most likely. One or both of you are being too picky. Or perhaps if you dislike all these nicknames you shouldn't name her Margaret.

Fwiw, I think Peggy, Meg, Maisie, Greta, and Molly are great.

This is my baby girl name, due in August! Excellent choice.

I was going with Greta for day to day , but Margo is so sweet too and lends itself to little pet names like Margo Mouse.

Detailing here, but What middle names are you thinking of? I kind of want something a little spicier since Margaret is a heavy, traditional name. (Margaret Rose, Margaret Anne... No thanks!)

Historically, Daisy was used as a nickname for Margaret.
I would veto Marge because of all the Large Marge jokes.
If you really hate the name and all its nicknames, just don't use the name or use it as a middle name. A lot of people honor the family member by picking a name that starts with the same initial.
Or you could do something ethnic, like Mairead, which is the Irish version of Margaret, or Margarita or Marguerite (which sound more like Margaret).

Daisy!

What about Garet? I know a girl with that as her actual name.

It's a family name. Wouldn't use the full name on a day to day basis, but like having the full name on paper. We have googled a little, but are wondering if people know of any other, less common ones. Made up is okay if it works logically with the full name.

For reference, here's the wikipedia entry. One or both of us have vetoed all except DH likes Marge/Margie and I don't hate Greta.

Maggie
Mar
Marg
Marge
Margey
Margie
Meg
Meggy
Peg
Peggy
Pegeen
Maisie
Mamie
Margo
Madge
Molly
Malla
Midge
Marga
Mags
Margu
Greta
Gretel
Marya

Thanks in advance!