Yes you are able to terminate your willingness to care for the children. That said it could have significant consequences on your daughter’s ability to continue to serve in the military
Army Regulation 600-20 paragraph 5-5 covers family care plans.
Basically if you terminate your willingness to be part of the family care plan your daughter will be forced to assume parental responsibilities. This means that she will most likely be given 30 days to find another caregiver for your grandchildren.
Should she fail to find another caregiver she will be separated from the service under Chapter 6 of Army Regulation 635-200; Separation Because of Dependency or Hardship.