It is very difficult to comment based on the limited information whether your child has Type 1 diabetes or transient diabetes since the blood sugar has normalised so rapidly.
It is possible to develop transiently high blood sugars during infections especially if a child is receiving glucose in the intravenous fluids (I don't know if your child received fluids and what kind of iv fluids) It is also possible that the child was developing diabetes and the infection precipitated it.
More tests would be needed to make a final diagnosis. Glycosylated Haemoglobin (HbA1C) is a test which gives an average of the blood sugar levels over the last 3 months and that would give us an idea about the baby's blood sugar levels over the last 3 months. There are other tests too which would need to be done under the guidance of a paediatric endocrinologist to decide about this.
Meanwhile, stay in touch with your doctor, continue to monitor the baby's blood sugar and give insulin if the blood glucose exceeds 160 mg/dl. If the baby does need insulin, the type of insulin should also be changed.