Here's a novelty, tell them the truth. Honey, these are their grandparents, they would not want to give the child a toy that could hurt the child and I don't suspect they would relish having given a gift that cannot be used for that reason. They shouldn't be offended that you are concerned for their grandchild's safety and if they would be offended then I really wouldn't be that concerned about what they think, you are doing your job by thinking about things that obviously do not occur to them.
Tell them that you have not said anything because you appreciate so much that they are giving the gift but you know they want your daughter to be able to enjoy the gift and that this has been a problem. Tell them that you didn't really know how to bring it up because you didn't want to hurt their feelings. Remember, they had parents and in-laws too when your husband was coming up and they must have experienced something like this. Just try to keep the focus on that they are great, the positive, and slide in the but as gently as possible.
If you are not comfortable really getting into this, sounds like maybe you are not that close to his parents, when they ask what to buy tell them it really doesn't matter but to please be careful to check the age of what they purchase. I think nearly everything has age parameters and tell them that these things are for safety and as long as it is okay for a child of 3 or under, for example, she will love it. You might even joke about the gift that is still in the closet until she is old enough, that you will wrap it up again and she will get it twice, depending on whether they have a sense of humor.
Or, if they are not there when the child opens the gift, open that sucker up before xmas and replace it with something appropriate and give the inappropriate toy to a charity for kids that won't have a Christmas.
You know, I have gotten many gifts from in-laws both with my husband's family and my brother's wives that were sooooo not me. I was raised so well regarding being a good gift recipient that I kept these things for years when these people never even came to my house, so would have no idea whether things were here or had left the building. I still keep things for a time but have gotten better about garage-saling the items within a year or two. I think we all need to do better with trying to do right by others but in a way that does not make things difficult and impossible for ourselves.
With the economy and everything else going on, I am planning to focus a lot more on just being together, enjoying that time instead of making myself crazy trying to "do" everything. Last year financially, xmas was difficult and what I missed most was getting a child or two from our angel tree at church. I plan to make up for it this year!