Same thing happened here, we had the name Lola picked out and then my sil got pregnant and announced they were very much considering the name Lola. They had no idea I had chosen that for our puppy(that's according to them).
I asked my brother if he was ok with me still naming my puppy that and he said to go ahead(I didn't bother asking her
I used the reasoning that even if the puppy and my niece had the same name that she'd find it cool, not be offended. There are people out there with the same name, we have two Mikes just in our family. Anyhoo, I have my Lola and my niece was named Tru. So I'm very glad I didn't pick another name because then no one would have used it.