A sister or sister-in-law of a grandmother or grandfather is commonly called a "great aunt" or, less frequently, a "grand aunt." Amy Johnson Crow of Ancestry.com argues that "grand aunt" is technically the more correct term, though it is less common.
The term "grand-aunt" is formed analogously to "grandparent." Grand aunts are two generations removed from a person, and this is the same gap that a grandparent is from a person who would use that term. According to Crow, a great aunt would then be equivalent to a great grandparent, both being three generations removed from the person. However, she concedes that this is not common usage. Rather, "great aunt" is usually used when speaking of someone two generations removed from someone.