I call/called my maternal grandparents Nanny (last name), Grandpa (last name) and my step-grandmother Grandma (last name). Since Nanny and Grandma had the last name (Nanny kept married name), it made that distinction between the two.
For my paternal grandparents, it was Nanny (last name), Grandpa (last name), my adopted grandmother is Nanny (first name), adopted grandfather is Grandpa (last name) - - I believe he passed away when I was 2 or so, so that's just how we refer to him now - - and then my step-grandfather was Papa (first name).
So with kids it would probably be something like that, only less grandparents/less confusing LOL