Granddaughter and niece are the same word?
Looks like it. It's the same in Italian – all Latin's fault, nepos meant grandson, nephew, granddaughter and niece... Other Romance languages have evolved their own words to distinguish between the two concepts but Romanian and Italian haven't.
Shouldn't it be 'an' orange instead of 'one'?
I used "an orange"; accepted per DL (Feb. 11, 2019).
Okay, so how do you tell the difference between when someone is referring to a granddaughter or a niece? Just context clues, or what?
Yes, only the context