I would draw something to explain it.
Telling her that a genome is very large and that is is very hard to find out the 1:1 exact order. Therefore you sequence contigs (or genome fragments or something like that). These fragments are ordered from large to small. You then count up the large fragments until you surpassed the 50% of your total genome size.
Based on the number of fragments you counted and the total amount of fragments you have you can find out how many fragments hold the most information (index). And based on the size of the fragment that passed the 50% mark you can find out if the most information is stored in large or small fragments?
Something like that, idn how much your grandmother knows and why you would even want to explain it to her :P
When you have a set of DNA sequences of different lengths and you arrange them from the shortest to the longest, then the N50 value is the length of the shortest sequence that together with all the sequences that are longer than it make up 50% of the sum of total sequence length. As Lesley suggested, you could then draw a simple figure to support learning..