A ninny grannet is a slightly variated form of ninny (a simpleton or fool). While not as insulting as ninny, ninny grannet implies more fustration, sillyness and outright comic stupidity to the person its being directed.
John and I were playing Halo for X-box when he totally killed my ass with a rocket launcher. "Ninny Grannet!" I exclaimed with fustration, as I waited to respawn.
It is said of the situation where a person has the bad luck to make contact with his testicles against an undefined surface or object, intentioned or not.
Given the nature of the word, it is more appropriate to design cases where the interaction is made with a moving object, for example, a ball.
Although it is extremely painful for the victim, it tends to be considerably funny to people who witness it.
Today in the baseball game the pitcher took a nutshot; the baseball hit him in the nuts.
Man, I just watched the funniest nutshot video ever.