In the story "Old Woman Magoun", the importance of the story lies in the fact that the piece is a part of Naturalistic literature. Naturalists believed that an animal lived in every man (or woman), that survival was based upon ones own ability to survive (Herbert Spenser and Charles Darwin), the free will did not exist, and that the text was a part of an objective experimentation by which the author was simply an observer in the action of the piece.
Therefore, old woman Magoun is simply not powerful enough to make a decision for her granddaughter, Lily. ONly nature, according to the Naturalist, is powerful enough to determine if one lives or dies.
While Magoun believes that she knows best regarding Lily, tragically, it is nature (nightshade berries) which takes her life and not Magoun.
That being said, think about all that has happened to Lily in her short life: her mother has died, she has lived a sheltered life, and her estranged and unknown father wishes to take her away from the only life she has ever known. Magoun knows that Lily cannot survive a life with her father. She is worried that a life with Nelson Barry (Lily's father) would eventually kill her.
So, is Magoun selfish? Does she think that she knows what is best for Lily? respectively, no and yes. No- Magoun is not selfish- in reality, she is only thinking of Lily and how a life with her father would harm her. Yes- Magoun does know what is best for Lily. Ask any parent if they know what is best for their own children and you will typically receive a resounding yes from them as well.