Say a woman (let's call her Jane) has a daughter (let's call her
Mary) and the daughter (Mary) has a child (let's call the child
Carol)
Jane is the grandmother of Carol.
If Jane has a child other than Mary, that child is Carol's Aunt
or Uncle and Carol is that child's Nephew (if Carol is a boy) or
Niece (if Carol is a girl).
So the relationship between a grandmother's baby and her
daughter's baby is that of Aunt/Uncle to Niece/Nephew.