This is a generation gap thing.
Very few Grandmas will tell you you were unreasonable.
I would have been smacked long before I was five, if I had carried on like that, and my mother would have felt horribly guilty about that.
Your daughter, however, objects to your raising your voice to make yourself heard and to stop the dear child from literally screaming herself blue in the face.
You sadly cannot make your daughter see your point of view. All you can do is apologise, then leave it at that.
To my mind, your daughter is making a right pig's breakfast bringing up her child, but that is her business and not yours or mine.
Probably your daughter is taking it out on you because she is at her wits' end - if she neither raises her voice or uses the naughty step, she has precious little chance of getting her little madam to behave.
Have a rest from looking after the children. I am willing to bet your DD will be back as soon as she needs you.