We can't legally give her a diagnosis but we can give her a restraining order. Your mother-in-law decided that she didn't want to get a job. Instead she became a foster parent with the idea that the government would pay her to raise her grandchildren...but only after she could prove you were unfit parents.

After being under investigation by child protective services, the police, homeland security, the IRS, you got fired from your job, and your wife was deemed mentally stable and turned away from a mental hospital everyone realized that grandma lied.