What's in a Name

So, this week I got a shocking and less than positive email from my mother-in-law.  Apparently she has been stewing over something terrible I had done. She went on a rant for two full paragraphs about why she is so upset with me.  So here it is, I referred to her ex husband's "girlfriend" as Grandma. I posted a picture on Facebook of Hubby's dad with his "girlfriend" and captioned it "grandpa and grandma" because that's what we call them.  That's right, how dare I.  Let me start by saying that this "girlfriend" has been in the picture for 18 years and has been amazing with the boys since the day they were born.  She has cooked, cleaned and come to stay (things my mother-in-law did not do).  I actually like my mother-in-law and have been more than happy with her hands off approach.  She too loves the boys but in a different way.  She doesn't drive and has a group of very close friends that have been there to spend time with and support her since her divorce. Let's just say she is still bitter about the divorce.  I am actually not sure why, she left him and she hates him so it isn't as if she wants him back.  I wish she would get over it and move forward.  I guess the reason it is still so painful is because they JUST made the final settlement.  When the initial divorce and support was decided they agreed that it would be reassessed when Hubby's dad retired.  Needless to say he just retired so it has been ugly.  She says he was hiding money and he said she was bleeding him dry.  Anyways, he will continue to support her until the day she dies so she is set (so I am not sure why she is so angry).
The email basically told me that "the girlfriend" let's call her N is nothing to Fynn and Hudson.  She doesn't share a last name or any blood relation.  She said N was a disgusting person to allow us to call her Grandma because she has her own "real" grandchildren.  It makes me sick.  If she really loved the boys wouldn't she be happy that they had more people who cared about them.  Furthermore, since she isn't able to help me out (she is legally blind, smokes heavily, has bad knees, and is pretty overweight) isn't she happy that someone is.  Let me clarify that N was not in the picture until after Mother in law and father in law divorced.  She has never said one bad thing about my mother in law and she highly respects the relationship my husband and his brothers have with their mother.  She would feel terrible if she knew she had caused any strife at all. Mother in law also said that if she finds out my three year old nephew has ever called N grandma she will have a corinary (I guess she better call the paramedics).   I also annoys because the boys will get the situation when they are old enough. Of course they will know that Mother in law is hubby's mom and that N isn't. They will see the relationship we have with each family member and have a bond with them individually.
I didn't really know how to respond to the email, hubby said to pretend it never happened. He said that it was crazy and didn't deserve to be responded to. I just responded that I was sorry it hurt her feelings and it wasn't my intentions.  Then I explained that the boys love her and that she has a special bond with them.  Gosh, I never anticipated things to progress like this.
By the way, to add fuel to the fire.  Mother in law used one of my pictures on facebook as her profile picture and edited one of the boys out of it. You heard that correctly.  She chose the grandson that she thinks looks like her, and that she favors and cut the other one out of the picture.  Um, that is disgusting.  I guess she is trying to get my reaction!