I don't think the movie goes into this exactt detail, but I took that part to be that Grandma was Grace's legal guardian. Thus the ability to withdraw her from school and making decisions regarding medical care.
I did find it hard to believe that Grace wouldn't find a way to see a doctor. Especially early in the film when she seemed perfectly cognizant about the fact that she could be having phychotic episodes. Just because Grandma says Kyou have a sickness of the soul" really wasn't a good enough reason for a girl who just a short time before had gone away to college and now suddenly couldn't find a way to see a doctor if she wanted/needed too.
IMO, it probably would have helped with the realism, if she had seen a doctor. I guess the film makers just wanted us to think "well maybe it's just an untreated medical problem" until the big reveal.