Sorry, VendingMachine, she is partially right. To call one's native grandmother, say, "Baba Masha"or "baba Anya" is very typical to small children in Russia, 'baba' here means 'babushka', and it's okay. Some of them keep calling so their grandmothers in older age as well.

gitana, VendingMachine is absolutely right that "baba" is a very rude word in all the other cases.