Don-
This is a good question and a good conversation starter.
If we're doing it right, the correct term is 'Domain Names', ultimately, and I am sure we all yearn for that utopian day.
:)
All kidding aside, I have had success at 'Grandma' audiences by referring to IDNs as a variety of terms based upon suitability to the audience.
If, for example I am in Macau speaking to an audience of largely Chinese participants, and describing [chinese].[chinese] domains, I would say 'Domains in your language'.
Where I am talking to a wider demographic, I might also refer to them as 'world language' domains and then offer a brief narrative of what IDNs are.
It seems that without the context of visual support and background on IDNs in some brief explanation, it is not as clear to the audience what is being discussed. Also, too much detail causes them to nerdfilter the technical mumbo-jumbo and gobbledy-guck, and then the balance of the discussion receives a reaction like I am explaining real estate on Mars.
Some of the better visual Queues that have been a real benefit are things like Brett London's early stage slides from many of our foundational stage meetings about UA, in some form.
Not sure if 'domains in world languages' answer your quest for a simplified 'grandma' term, but I hope it helps.
And perhaps others on the list might build on the concept...
-Jothan