Hi mufarina, I would like to correct my previous reply about this question. After some more verification, I agree that the relationship should be "Child" if you are sponsoring your parents and"grand child" for your grand parents.
I came to this conclusion as I noticed in the drop down there are only option of child and grand child. For the confusing case of confusing reply as parent, there has to be grand parent option as well. But its not there. So I corrected my previous understanding about the question and believe that "Child" is the correct answer. Sorry for confusion there.