Its not uncommon for babies to get ringworm and its can be mistaken for cradle cap, get it checked out with your GP as my daughters wasn't detected til later on when the fungus had spread and now she's on antibiotics! Its not dangerous though so don't panic.
Babies can get ringworm, but it's not a serious complaint and even if your granddaughter has it she should be fine quite soon. To make sure that it really is ringworm, you might find it helpful to look at babycenter.com where you can find an exact description of symptoms as well as information about possible treatment.