If you have Birth Registration, then that should be added to the profile, as well as the other census information. Does the Birth information say who the mother or father is? If not, then yes, you could create an unknown daughter, who is linked properly to 'her' father and mother, as well as to 'her son', with Research Notes, being added to all profiles, at least until there is complete documentation. Since the 1881 census shows him as their son, not grandson, an explanation needs to be kept in both grandparents and his profile to explain that it is in error. Unfortunately, it doesn't look like a change can be made to the family search citation. I don't know if an image can be checked to see if it is correctly stated on the image and just not indexed correctly.