You know your child best, and what the relationship between your child and the grandparents is like. Do what feels right I guess.

DD is 9 years old and has never stayed overnight with my mum. Not because I wouldn't trust her, quite the opposite in fact, but simply that the opportunity/situation has never arisen (mum being on the farm and often extremely busy). On the other hand, she regularly has sleepovers with her Grandma (X-MIL) and Grandad, she's also gone on holidays in the caravan with them and an assortment of other grandkids ever since she was about 4 years old. She absolutely loves it, she comes home with so many stories about the exciting things she gets to do with with Grandma and Grandad, the places she's been and everything.

I do think it's important where-ever possible for kids to get used to spending time with extended family without their parents there, or with other trusted adults. It really helps build that community and teaches them to understand different dynamics and that different rules apply in different places. But it has to be when you're comfortable with doing it, not before.