If you find yourself unwilling to answer the question, or if you lie, the genie is allowed to take a small revenge on you.
Grandpa named her Goldilocks to keep the situation hidden from the children, but he did put the cage in the kids' room and allow them to play with her and take care of her.
In Fablehaven when all seems lost Grandma/Goldilocks spells out "I M GRAM" on the floor with her kernels of food and they take her to Muriel to change her back.
After Muriel gets released, Grandma takes them to Nero the troll because he has a seeing stone and can tell them where Grandpa and Lena are being held.
After being part of a failed rescue mission, Grandma is imprisoned at Living Mirage until the Sphinx came to make his minions step down.