How to deal with my parents undermining my parenting.?

Ok, so you're the parent and grandparents are being busybodies? In that case: you listen to what they have to say and consider mining it for any useful wisdom, perspective or commentary. Then you remind them that you are the parent, not them, and that you have a legal and moral obligation to follow your own views of what is in the best interests of your child, not to obey outside counsel, however kindly intended. In extremis you can withhold contract with their grandchildren but do not threaten them idly with it.

I would write them a note explaining how you feel on the matter. Explain to them that you are the adult who is supposed to parent the child, it's fine for them to give advice, but they shouldn't take over your job of parenting. 9x out of ten I find written explanations to work far greater than verbal ones.

You have to firmly talk to them and say they need to stop, and not let your child spend as much time with them if they continue.

Ok, you can start paying a babysitter then you make all the rules but for now you have to deal with your parents.... with free services there are less demands...you get what you pay for.

They do not watch our son because we need a babysitter, it is so they can spend time with him.