Pointing to a lady, a man said, "She is the only daughter of the mother of my…

Blood-relation puzzles are solved by substituting each descriptive phrase one relation at a time, working from the innermost reference outward. Two standard substitutions apply here: (1) "the mother of my son" always denotes the speaker's own wife, assuming a standard family in which the speaker is the son's father; and (2) "the only daughter of X" denotes X's own daughter — a distinct person one generation below X, never X herself.

1. Identify "my son" as the man's own son.

2. Substitute "the mother of my son" with the man's wife, since she is the mother of his son.

3. The lady is introduced as "the only daughter of [the man's wife]", i.e., the wife's own daughter.

4. In a standard family, a child of the wife is also a child of the man, so the wife's daughter is the man's own daughter.

5. Therefore, the lady is the man's daughter.

Cross-check: could the lady instead be the wife herself? That would require the wife to be "the only daughter of" herself, which is impossible since no one can be their own daughter. This impossibility confirms the substitution chain above and rules out any self-referential reading, leaving "daughter" as the only value consistent with the sentence.