The grandmother/old woman/old lady/ was wearing a blue dress was my grandmother.
The grandmother/old woman/old lady/ who was wearing a blue dress was my grandmother.
Wearing a blue dress grandmother is my grandmother.
The old woman[lady]in blue is my grandma[mother].
The old woman in blue is my grandma.
The old woman who wears blue clothe is my grandmother.
That old lady in blue is my grandmother.