MIL who had Munchausen syndrome, HELP!!!!?

My MIL had Munchausen syndrome with my husband when he was younger and her hates her for it, He was almost put in to foster care because of it, but his grandma took him in. My MIL always wants to take my daughther, and I don't feel comfortable. But I also don't want her to feel unwanted. How do I over come this fear. And is it wrong that I feel this way? Also my MIL is a little wacked out, so I suggested that she come by my home to visit her granddaughter and it seems to be an issue.