My name is Jeanne. Not once did my grandmother spelled it correctly. Always, always Jean. I was 8 or 9 when she gave me something with "Jean" on it and I expressed how sad I was that my name was misspelled. Grandma's reaction was to say my parents were stupid for spelling my name wrong and I was stupid for taking their side.
A real winner of a grandmother. Hit the grandma jackpot, didn't I?
Needless to say, that utterly poisoned our relationship
This. Op, it is not your responsibility to salvage their relationship. It's not your responsibility to assure your DD doesn't get hurt. A little hurt over this issue, instead of something bigger, helps your DD learn who Grandma is and your DD will be wiser for the knowledge.