It is time to have a loving but candid conversation with your in-laws about how your child will be raised. I would suggest that you take them to dinner some evening, during which this topic will be addressed. When the moment is right, tell them of your concerns. Make it clear that you love them and want them to enjoy their granddaughter. But the responsibility for how she is being managed must rest entirely with you and your husband. Remind them that they had their day-- when the decisions about child rearing were theirs alone. Spell out the issues that mean the most to you, including your desire to raise your daughter according to Christian principles. Try to help them understand your reasons, but recognize that their worldview might make it impossible for them to agree. If that is the case, they'll need to honor your wishes anyway.
It is likely that sparks will fly during this conversation. If so, try to remain calm and stand your ground. If the worst occurs and the dinner ends in an emotional walkout, I suggest that you give your in-laws some space while they're cooling off. When you do come back together, let love and respect continue to be your guides--but don't back off on the issue at hand. You have the right to do what you're doing. Your in-laws are the ones who are out of line. But remember that Amy needs her grandparents, and your goal should be to harmonize your relationship. In most cases, that will occur in time.