I've watched a little boy several days a week for the last two years. He started with me when he was six weeks old. I made it very clear that when he was here, he would be treated as my own - I would abide no cio or feeding schedules. His mommy was delighted that he would be loved and calls me 'his other mommy'. Obviously I didn't nurse him, but he was rocked or 'history channeled' (a intricate and special method developed by my dh involving walking and patting in a tv lit room requiring males of the species to then sit in the rocker and watch the history channel until every 'good' show is over) to sleep, fed on cue and never left without companionship.
The person watching to baby has some right to not feel they are abusing the child. Afterall they have a relationship with the child as well! Grandma maybe needs to let them know she needs to try some othe techniques during the day to keep them both happy.