Martha SELWOOD Head Widow age 72 occupation Living on own means born Dinton, Wilts George PARKER son-in-law widower age 41 General Labourer Fisherton, Wilts Ann Reeves granddaughter unmar age 17 (no occupation listed) Salisbury, Wilts
Ann Reeves listed above seems to be the daughter of William REEVES and Ann who was baptised at 6 January 1833 at St Martin, Salisbury. (FamilySearch)
William REEVES married ANN PARKER also at St Martin on 8 August 1830. (FamilySearch)
Anne PARKER, the daughter of Reuben Parker & Martha was baptised at Fisherton Anger, Wiltshire on 17 February 1811. (FamilySearch)
George PARKER, son of Reuben PARKER and Martha was baptised at Fisherton Anger, Wiltshire (now part of Salisbury) on 23 July 1813. (FamilySearch)
Reuben PARKER married Martha BUTLER at St Martin Salisbury on 13 July 1803. (FamilySearch)
Martha PARKER married Thomas SILWOOD (sic) on 1 July 1826 at Fisherton Anger, Wiltshire.
Thus it seems George PARKER listed on the census is Ann REEVES uncle and Martha SELWOOD is indeed Ann's grand-mother per the census listing.
It is also highly probable that George Parker is actually Martha's son not her son-in-law or other relation. He would have been her late husband Thomas SELWOOD's step son (aka son-in-law) and perhaps Martha used this designation as a way of explaining the difference in their surnames.