I'm so sorry for your loss. Even knowing our parents will not be here forever, doesn't make the pain of losing one hurt any less.

Having a death in the house is kind of 'creepy' to kids...worse if they pass away in a bedroom that belongs to a child. Yes, they love the person,...but thanks to modern television, and how the departed are portrayed....they don't want to 'see' them after they die....or they fear they will be 'haunted' by a ghoul or zombie.
Kids prefer to remember the loved one as they were in life. They have a difficult time separating the deceased's 'spiritual self' from their living self.
 
Your daughter (depending on her age) may be feeling (deep down) a little resentful or upset at you for 'letting grampa die' in her room. She could even be a little angry at him for leaving, if she was close to him.
Usually when we see the spirit of a parent or grandparent in a dream, it suggests the need for guidance of some sort.
The death of a family elder brings forth all sorts of feelings and fears about mortality....especially to children.
Maybe her 'task' is to forgive you,....or talk to you about his passing. Maybe she feels the need to 'keep him close' and her task is to 'let him go'.
Again, depending on her age, you should have a 'heart to heart' with her to see if there's something nagging at her.

Hope this helps.....Hugs
J

That he passed away a while ago, and your daughter is still getting this message from him is a puzzlement.
No matter how trivial it may seem...
Is there a pet project of his, that he may have been working on when he became ill?
Something he could have started, that possibly needs closure?
Did he have hopes of her going to college, or entering a specific field for a career?
Did he keep a journal? ...or a memory book?
Could there be some place that he always wanted to go?

As to what you are to give her....only you and she will be able to figure that out.
It could be anything from a certain photograph, or a christmas ornament, to a special word of wisdom.
Did he make something that could be passed down?
Was there something your daughter used to play with of his when she was small?
Could your Father have told you something years ago, that you found especially helpful? Something that felt very precious to you...? Something that made you laugh or feel better when you were feeling particularily sad?
That she sees him smiling, suggests it is something pleasant and loving.

I hope I've given you some clues. If you do figure it out...please let me know. I'm very intrigued, and puzzled myself!

Brightest Blessings and Good Luck!
J