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uhhh.. thats the way most families do it anyway

That always bugged me a bit that everyone called him grandpa but that seems to be a common thing on TV sitcoms as others have pointed out. Maybe TV producers think that we viewers are too stupid to keep track of more than one name for a character(?) Or maybe it makes it easier on the producers who would have to figure out what everyone would call him - for Lilly it would be pretty simple, but what would Herman call him? Dad? Vlad? Mr. Dracula? And what about Marilyn?
Ultimately I guess it makes it simpler for everyone; producers, audience and actors, if he just has one name.

It was just his known name, just like everyone on the Beverly Hillbillies called Granny "Granny".

Because he was a grandpa! lol Herman called him grandpa too. It's just a habit some families get into.
My one grandmother used to refer to my granddad as "Our dad". I've known couples who call each other mother and dad, usually older couples.
Many years ago my mom heard one of those older couples calling each other mother and father and she said to my dad, "Don't you EVER call me mother!" She was only half joking.
My son always called my dad "Pap" and darn it if I didn't start doing it too.

On "The Simpsons", Marge called Homer's father "Grandpa" too. I don't think Lily would have called him it if it weren't for Eddie and Marilyn.
Annoying the world since 1960!