The Doctor dropped the bombshell that he was once a dad during tonight’s episode of Doctor Who.
So it follows that if he has a granddaughter then he must at one time have had a child. The subject of whether he has sex is one that has been alluded to but never really expanded upon and as what is a family show it probably never will.
However I have an alternate theory to explain the existence of a granddaughter, especially given that she appears to be human rather than Gallifreyan. She may in fact be the daughter of a human that The Doctor picked up and adopted as his child much in the same way that Death adopted a child in Terry Pratchett’s Discworld series of books.
Coincidentally the name of Death’s granddaughter is Susan.