I learned my FMIL was calling my grandmother "Grandma", which is what FH and I call her. My grandma told me she found it a bit unusual because FMIL, obviously, is not her grandchild. FMIL says she doesn't feel comfortable calling an elder by their first name (FMIL's culture stresses respect for elders), but when I suggested "Mrs. [Lastname]", she said it sounded a bit formal, not like a title for a family member, and I had to concede that.
What is the right title here?