Would you be mad?!

So my husband's grandmother has told my daughter, she's not even 2 yet, that she's ruined and when she cries that she's going to get the fly swatter, I guess to spank her.

Alittle back story, they have brainwashed my husband into staying with them even to the point in signing the house over to my husband so it's "ours" when they die. They refuse to let him leave which in return I don't leave because my husband is a great man a great father. He works five days a week from sun up til sundown doing hard labor work in the sun. When he comes home I try not to nag him about the day we, me and my children, endured from his grandmother. His father died when he was a child and I believe they are trying to keep him to protect him or to smother him or something. But we can never enjoy our lives. We have a whole section of the house to ourselves but currently they let his brother move in too so our children sleep breathe and eat all in the same room. Anytime we talk about renting or even leaving temporarily they twist something new and he doesn't want to go. I understand I have one living grandparent and I love to spend time with her but I don't think I would move in full time with her. Even my parents I wouldn't move in even though they tell me I can. I know this sounds pretty selfish but I don't want to live here another 10-15 years while they're still alive.

Am I over reacting? After our first child was born I suffered a miscarriage 3 years later. She looked at me the next day we told them I was loosing the baby and told me she wanted to buy my birth control because we didn't need anymor children and if I wasn't responsible enough she would be for me. We tried for that baby and it was a hard kick in the head statement. She's rough on my firstborn and now it's came onto my second baby. I've taken up for my first born telling her she will not put a hand on my child and now I want to do the same with my baby baby.

I won't lie I have terrible depression and anxiety. Simple tasks I cry about and here recently I have went to get help from therapy I know and feel deep down alot of my health is because of them and I don't know what other way to tell my husband.