Is this at all acceptable?

[rutger5000]

For a mother/grandfather/grandmother this is perfectly acceptable. Your grandfather is well enough to be a bit excentric, and you drove him into a difficult situation. I suppose you live under his roof, though that doesn't rob you from free will, it does allow him to sabbotage your attempts of being stupidly stubborn.
Also severe longlasting dandruff probably would made you bald faster.

You seem to be under the impression that it's severe dandruff. It's actually a very mild case that's visible only when: A. You Are actively trying to look for it (i.e. getting close, moving my hair around to see my scalp) , or B. Deliberately messing with my hair. My grandfather does the former.

Still your grandfather has the right to be a bit excentrict, he is old dammit. From his point of view your just being stubborn and childish, so he ignores your right to privacy. Is it wierd? Yes, is it unacceptable? No. I take it your grandfather is your caretaker, these are allowed to invade your privacy to furfill that task. And from his point of view that is just what he is doing here. He is taken care for you, for you are not taking care for yourself.
Wetter he is right or not frankly isn't relevant.
You're wierded out by his behaviour, as you should. But by far the easiest way to stop it, is to sit him down, and tell him to stop and that you'll do it yourself from here on. Just budge in, how bad can it be to use shampoo?