No, the Charles I was referring to, was the poster in this thread, not the PoW
Come to think of it, it would be odd hearing Kate or Meghan speaking of Diana as "my mother-in-law".
Of course, in terms of protocol, they would have to refer to her as The Princess of Wales or Diana Princess of Wales, but speaking with friends, casually, I can't imagine any of them calling her "mother-in-law" as in - this ring belonged to my mother-in-law
Actually, the Prince of Wales DID meet his maternal grandfather -- not just at his christening but also, on the occasion of his 3rd birthday (I've seen photos). It's just that he obviously doesn't remember him; if so, only vaguely.
By contrast, his paternal grandfather (Prince Andrew of Greece and Denmark) died four years before his birth, and so obviously the two never saw each other in person. Was that the one you meant, when talking of his "long-deceased grandfather he never met"?
But it doesn't matter in the end, since both were not only blood relations but also, direct ancestors to Charles: therefore, both count as his grandfathers.
Things definitely get messy when it comes to in-laws: you're probably right that it's mostly a social, rather than legal, thing to refer to a deceased in-law as *Father-in-law* or *Mother-in-law* for social reasons. In the days before modern medicine, despite the fact that people generally married and had children young, a married couple couldn't count on any grandparent still living, as of the wedding (interestingly, the Duke and Duchess of Württemberg are both still living, as are Duke and Duchess Max in Bavaria: they are the four grandparents of Duchess Sophie, who in 2018 married Count Maximilien d’Andigné).
So the terms "Grandfather-in-law" and "Grandmother-in-law" have been largely irrelevant; usually, they have been historical references. Such a person may well have died long before the marriage, in which case the spouse would never have been in a position to call him "Grandpa" or "Grandma." But then, if I understand correctly, such a person has typically been referred to as "her husband's grandmother", rather than "grandmother-in-law", even if she was still living at the time of the wedding. The late Queen Elizabeth, the Queen Mother of the UK, for instance, was never really called the "grandmother-in-law" of Sarah Ferguson, Diana Spencer, or Mark Phillips -- even when still legally married into the British royal family.
Emperor Franz Joseph of Austria also lived long enough to see some of his grandchildren marry and have children of their own. But Wikipedia uses only quotation marks to refer to the husband of his granddaughter Auguste (a princess of Bavaria) as "grandson-in-law" (Archduke Joseph August of Austria-Hungary).