Despite her powers, Granny Rags is classified as a civilian, and killing her will count as a civilian kill against Corvo's chaos. ... Granny Rags doesn't "detect" Corvo before the end of speech and her first teleportation - Corvo can steal the key from her and run towards the door.

Should I avoid Granny Rags?

It's not necessary to completely avoid Granny Rags to get the Clean Hands achievement, as none of her quests involve killing anyone. In her first quest, rendering the gang members knocking on her door unconscious will be counted as succeeding, and she will give you a rune as a reward.

Does killing Granny Rags count against clean hands?

Kills by rewired traps (hacked devices), drowning (allowing the death of) knocked out NPCs (by rats), and certain events (like Sleep Darting Granny Rags before her cameo is destroyed) will result in a kill.