I have a coworker who named her daughter 'Alexia.' This coworker came to my place of work before she gave birth, and she would always tell people what she was naming her daughter. We don't get along that well, so I 'forgot' to mention to her that the name means 'loss of an ability to read.' Heh.
For future reference, there probably isn't a whole lot you can do. If someone is dead-set in love with a particular name, it doesn't matter what anyone else says, and any dissenters might be seen as "stuck-in-the-muds with no imagination and can't see that Mannollloo Blossom Esmerelda is a beautiful name." And if it's someone telling you the name by proxy (as in your case, with the grandmother), it really depends on how they say the name - eye rolling? beaming with joy? It's also out of their hands, so I think saying anything is a waste of breath.