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Hi C. - gosh that must have been really terrifying for all of you when your grandmother collapsed. I'm very happy to hear that she is doing better.
As for your daughter, I think she is processing through what she saw and is doing very normal things role playing with her dolls. I wouldnt necessarily be afraid of it or even really discourage it at this point. If the issue of death comes up, like when she's playing with her dolls, you might engage her in some age-appropriate conversation and even ask her some questions like what does she think dead means? Perhaps let her talk with her great-grandma on the phone or the two of you can make her a get-well card to send.
My oldest son had a lot of questions about death starting at 3.5 and on through 5 or 6. He would see something happen in a movie or wonder why I was disappointed when he squashed a bug on purpose. I was pretty ill at one point and he wanted to know if I was going to die and what would happen if his little brother died. He would ask hard questions like "if heaven is so wonderful, why shouldnt I just die and go be with God now?"
I would always feel alarmed inside because my son was worried about thoughts and things too big for him. We talked practically but reassuringly to him. We told him it's just nature's way that plants and animals and people are born, they live their life, have kids of their own, and when they are very old, it's natural for them to die. We will miss very much people who die but will always have our memories of them to remind us how much we loved them. I told him how God loves life and wishes for all of us to live a long and happy life. I told him how he was going to keep growing bigger and bigger until he was as tall as daddy. How he was going to go to school and then high school and then college and then maybe get married one day and get to be a daddy and even a grandpa. We told him that he would love his kids and his grandkids as much as we all loved him and his brother.
Some of that is too advanced for your little one but I hope it will give you some peace of mind that even little ones are able to understand deep things about life and death. They just need it in little packages at a time. I hope your gm continues to do much better and is around for your daughter to enjoy for years to come.
Blessings.
C.