You have every right to set boundries on what your Mother discusses with your child . What you wrote sounds like a good way to put your foot down with her . She should not be teaching him her views against your wishes .
As for explaining it to Zac ,keep it as simple as "Grandma has her own ideas about the world ,but we have ours too " then give him an example such as "we have cake and ice cream for your birthday and you get presents on that day , Grandma doesn't do that she believes differently " . Ask him if he likes your way or hers on that example .....let him think on it and I think he will begin to see his family has some good ideas .
I would be careful villifing Grandma's God or ways ....just point out to him that it is her way and NOT yours . You might also show him how the world is a big place with many different ideas give some examples of how other people are different in beliefs ,yet we can all get along and be tolerant even if we do not believe the same .
Teach him to speak up to Grandma ...When she begins talking about her God he can tell her, "That's nice Grandma ,but that is not what MY family believes ."