Oh dear! I can totally relate to that. I always had a very good relationship with my DiL's parents, until our GC came along.
My DiL's mother can be very bossy, pushy, manipulative, intimidating, and always likes to get her own way! I, on the other hand, tend to be very laid back and easy going ... until someone pushes the wrong button!
Whilst we are still on friendly terms, for the sake of our respective son and daughter, things will never be quite the same as they were before GC. There's the odd occasion that she has deeply upset me, and a couple of times I felt I had to make it known, although she simply twists things and makes it sound that I'm the one at fault. I've decided it's not worth the hassle, or the worry, and now I tend to take a step back whenever she's around, and let her get on and do her own thing, however much it grates on me! My son, and DiL, are both aware of what she can be like, so I simply keep my mouth zipped now and let her get on with it! When she's not around, I cherish the special times I get with my GC, having lots of love and cuddles, and I hope that she'll grow up knowing how much she's loved by hubby and I. I actually feel like a great weight has been lifted of my shoulders, now I've taken that step back!
So, my advice to you would be the same as Stella1949, and that's to grin and bear it. It really isn't worth causing any upset over. Yes, you will probably be upset yourself on occasion, and even angry, but try to put a smile on your face and rise above it. Bite your tongue, and always be polite. Your son and DiL will see what a great GM you are, and your GC will love you for who you are. Don't let the other one spoil it for you!