Hmmm...another perspective...I'm sorry to say but the husband sounds like a momma's boy. At this stage in his life that will most probably never change. He is the one I would confront if I were you. If he is letting his mother abuse you and treat you badly then I would eighter make him fix the situation or move your family away from her. I bet his answers to your confronterher/him will tell you quite a few things about both of them.
I'm with Valis on this one. She's not a direct relative to you, but your husband is.
She doesn't help with rent or a bill
I'm not sure what you're living arrangement is there, but it sounds like she's "renting" from the both of you. She sounds like a manipulative, controlling person. My father is the same way (who is NOT a JW). He puts on a smiley face when he's around my fiance, but talks shit about her behind her back. He's pissed off that we're getting married, because she's stealing me away from him. He's also threatening NOT coming to the wedding, which is fine with me.
It sounds like your husband is still very much under her control tactics. Remember, he grew up with her, and she has been controlling him all her life. Now that he's starting to pull away, she starts tightening the grip. When she doesn't get her own way, she uses threats, or cruel behavior to get what she wants. I'll bet she'd be happy as hell if the two of you split up, then she could have her little boy back.
Since this is not your immediate relative, it would be worthwhile to encourage your fiance to stand up for himself. I bought a book a while ago called "In Sheep's Clothing" and loaned it to my mother (who is a JW) to help her deal with my father, and is still reading it. It might be worthwhile to look into a book like that to get some help on how to deal with your mother-in-law.
I wish you luck on improving your living situation.