You will be knitting with lace and working short row shoulders. The pattern starts flat at the waist, knits down to the crotch and back up to the waist then is knit in the round to the arms and knitted flat front and back. It is not nearly as complicated as that sounds, however.
This one is sure to win you huge Gramma points! Add a ribbon or bead choker and maybe a tiara she is ready to dance!
I’ve made a little YouTube showing knitting with lace.

Here’s a little rewording that might help:

Start increases:

Kfb in first and last stitches of every row, until you have 40 stitches. knit for 3/4” or match the front. Join with the cast on row and, working in Stockinet, mark beginning of round and place markers at sides, knit around twice ending in center back.