If we have a look at the role of the grandmother and what she contributes, I don't necessarily think either of the two options you have suggested can be accurately used to describe her. However, if I had to pick one, I would say she is definitely more benign than evil.
Clearly the evil character in this story is the Misfit. Ably supported by his henchmen, he calculatingly disposes of the family and lastly shoots the grandmother in cold blood at the end. The grandmother is definitely not an evil character in the same way. However, we have to admit that she is an extremely selfish, egocentrical and distorted character who always tries to manipulate others to try and get her own way. There are plenty of examples to show this, but most important perhaps is when the grandmother realises that she might not know where the house she used to live in actually is after they have been trying to find it and how the cat, that her son told her not to take, makes his appearance:
"It's not much farther," the grandmother said and just as she said it, a horrible thought came to her. The thought was so embarrassing that she turned red in the face and her eyes dilated and her feet jumped up, upsetting her valise in teh corner. The instant the valise moved, the newspaper top she had over the basket under it rose with a snarl and Pitty Sing, the cat, sprang onto Bailey's shoulder.
This of course causes the crash that makes them easy pickings for the Misfit. So, although the grandmother is not evil, and has good intentions, we can't precisely call her benign, as her "good intentions" actually lead the family to meet their doom.