All very good advice.
Also, almost impossible to accomplish the goals you have in mind with a difficult child who has her own ideas about everything.
I advise you to contact a women's shelter. If they have room for difficult child, I suggest that she be moved there ASAP. Not only will they help your daughter learn to take responsibility for herself and her child, they will protect her from the child's father and his crazy family.
Because difficult child is "hanging out" during this time, I am afraid that too many rules, however much they need to be understood, will send difficult child out of the house to live somewhere else with her baby.
And then, she becomes fair game for the mother-in-law.
If a battered women's shelter is not available to help your daughter, my suggestion would be to call 211 and learn what other options or programs might be available.
Once you have more information, you will see more clearly what action to take.
If you do decide to try to do this from your home, can you find a way to present the rules to her not so much as rules as goals? Like "I think if we do it this way....", or "I was wondering whether you think we could each write up a list of expectations, so that we all know what our responsibilities are during this time."
Something like that.
Maybe have weekly family meetings to discuss how things are going for her.
Do you see what I mean?
Rather than trying to instill rules, approach these issues from the perspective of the goal of establishing a safe and healthy home, and the kind of experience everyone can look back on with enjoyment.
No matter how far short we fall of our goals, they are a way we can work toward making things better, day by day.
Wishing you well, Masta.
You must feel overwhelmed!
Barbara
