Relatives who never met previous relatives?

Of course he is her Grandfather and an ancestor, as is you Great Grandmother to your Cousin.  You might want to look up the definition of ancestor, basically it is anyone in your bloodline who was born before you.   Grandparent is a title.

Being an ancestor has nothing whatsoever to do with whether or not you've met them.

Yes, you don't have to have met someone for them to be an ancestor. Most of your ancestors are people who died before you were born.

You have ancestors that go back to the dawn of time. If you are an American of European origins, you can probably find 75% of them back to at least 1850. Whether you met them or not doesn't count. If your father was killed when you were still in the womb, he would still be your father.

An ancestor to you are your parents, your grandparents, your great grandparents and so on back, it matters not if you have met the person or not, they are still ancestors

To my mind in Britain, 'ancestor' refers to several generations in the past, maybe at least 200 years ago.

Thus nobody knows their ancestors face to face.

Yes, grandparents are ancestors.  Even someone who died several hundred years before a person was born can be that person's ancestors.