The concept of infant baptism is predicated on the notion that the faith of the parents stands in for the child, because Baptism requires faith; there is a reciprocity between God and His children, it is not merely a one-way operation so, someone has to promise to raise the child as a Catholic (Baptism is an entry point, not an exit point) and that responsibility usually falls on the (parent/guardian).
Perhaps something could be worked out between you and your daughter, so that you could bring her to church and be the point person in her Catholic upbringing. I realize there are lots of boundary considerations to take into account, but maybe you could begin a conversation that could provoke some thought about it.
- Why do they want her baptized at all?
The point could be made, to them, that if they want her to have a Catholic identity then this child needs to live that out . . . beyond simply a ceremony and a certificate.
Lastly, don't let your frustration lead you down the path of an illicit Baptism. Trust that God may use this circumstance for good. You may not see the end point, but God does and He is well aware of original sin and all the other problems to overcome.
Just pray, trust, and dialogue in love; something surprising may just happen.