My mother in law is competing with me for my child`s love, attention, closeness, and affection. what can i do?

i (22 yrs.old) had my first baby 9 months ago.and i dreamed about this wonderful irreplaceable bond me and her would have. then 2 months before she was born me and my fiance(26 yrs. old) were forced to move in with his mother, an overbearing, strong minded, nosy, irritating woman who is so much in our business that she throws a fit and threatens to kick me out just for closing our bedroom door to have some time to ourselves! Shes manic depressive or bipolar or something and she gets lonely or bored and ends up spending every waking minute going in and out of our room bothering us! my fiance has spent his whole life being bullied, pushed around and manipulated by her so he has major trouble standing up to her and telling her to back off. And she never really liked me to begin with. well when my baby was born she began spending even more time in our room and constantly picking up the baby,bothering us constantly, taking her out of my arms to comfort her if she was hurt or crying, standing by her high chair talking and distracting her while i fed her, doing all the things that i as her mother should be doing. She showed no regard for boundaries and its only getting worse!!! around other people she takes her from me so she can show her off and hangs around who ever has her. i`ve been noticing that my child is starting to get in the habit of crying when set down and stopping when picked up so to break the habit me and her father only pick her up if she crying for a reason, but his mother will come in behind us and play the good guy by picking her up even when we tell her not to. she cant cry without his mother running in our room instead of letting us handle our own child. Now its getting to the point to where my daughter sees her run in every time she cries (door closed or not),and she sees her pick her up from other people and sees her sitting there when i feed her and my kids starting to get confused. I feel that shes starting to not know who her mother is.i cry all the time when shell walk into the room and my daughter reaches for her and then wont come back to me. its also gotten to where she cant stand in the room at all without her struggling in my arms to get to her, but she wont do that to come to me. I`m starting to think she thinks that her grandmother is her mom.and nothing breaks my heart more. this is my first child and for nine months i dreamed of my baby being close to me and choosing me over anyone else and his mother has completely taken that away from me, shes taken away my right to be her mom and shes taken so many experience and bonds that i should be having with my daughter and she loves every minute of it! she truly enjoys it when my child chooses to go to her instead of me, especially in front of people and im at my wits end. i don`t know what to do but i need my daughter to know that im her mommy. i need to have that special bond with her and need for her to choose me above anyone else. before its too late. i just dont know how. can someone PLEASE help me!!!!! tell me how i can make her back off and how i can get my child back. how can i make her realize that im her mommy. How do i get my baby back. i just want what i see all other mothers have. i gave birth to her so i think i deserve that. So Please Someone tell me what i can do!!