Grandniece and great-niece are interchangeable terms that describe the daughter of a person's niece or nephew. Grandniece aligns more traditionally with the term grandson, but "great" in the expression great-niece means one generation removed, according to the website Grammarphobia.
Someone who has a grandniece is a grandaunt or great-aunt to that person. Another way to frame the relationship is to note that a grandniece is your sibling's granddaughter. The relationship between a great-aunt and a great-niece depends on many factors, including proximity and the relationships between more closely related relatives. Members of a geographically close extended family may develop very warm relationships.