Really hesitated to post this but here it goes.
My mom is abusive. She physically abused me and my brother. The youngest two not so much. But she has "lost it" and beat my sister to a pulp when she was about 20 years old.
When DD1 was born, I had the same fears. I saw my parents about once a month. They still have never babysat for us ever. In fact, I have never left my kids with anyone. I am THAT super-protective mom and it will be going on 4 years soon.
I was acting in such fear. I was constantly afraid that she was going to blow up, (if you are an abused child you will know that deep-seated anxiety that goes along with always making sure everything is perfect, because you are always on edge). One day she almost did. She demanded my time when baby needed me and I said no
She was unsure, I was always the submissive one, quick to obey. I said no, and we had a huge argument with hubby right there holding the baby. I took my baby and went to bed. I was shaking. We were sleeping over at her house. I prayed the whole night. The next morning, it was as if nothing happened and she was embarrassed about her behavior. I set the boundary that my child comes first.
Another time, my sister spoke to me disrespectfully. My mother overheard, and slapped her. And my dad then (very uncharacteristically) smashed a table. At which point my husband said that we are leaving and we left. Boundary set that we won't stick around for physical violence.
That first year we set many, many boundaries with my parents. My daughter will be four soon, and those incidents all occurred within her first year. I realized that she will encounter unhealthy, negative people and I can give her the tools to manage them by actively showing her how to deal with it.
Both my daughters adore their grandmother, as in ADORE. She has mellowed out quite a bit. She is the most patient, cool, funny grandmother there is. She definitely resents that I won't leave them alone with her, but I don't leave them alone with anybody. I am there but she is free to take them for walks by herself or they will play by themselves etc. But she just enjoys her time with them. The other day we were talking and she said one thing she doesn't have is patience. I said, "You have much more patience with your grandkids than you ever did with us." "But that's different, grandchildren are special."
Recently, we had to move and my FIL and SIL is now staying with us. FIL is very sick but is a drunk. In my husband's words "He is not a good person." I lost so much weight in that first month due to stress. He is so drunk that he can't find the toilet at night and then my husband has to help him. Then at 1/2am at night he will pick a fight with him physically and scream and swear and shout. Until the day when my mother rocked up nice and early before he left to go and drink ... It has been about 4 weeks of silence. The man has not even looked at me skew. He has never needed assistance again at night. And all my mother did was threaten him. Sometimes it is good to have people like these as a back pocket Ace.
I think you should let your in-laws see your daughter. Limited access, limited time. It will set up a healthy way for them to interact in the future if you set those boundaries firmly and you do it now.
"I thank my God every time I remember you. In all my prayers for all of you, I always pray with joy ...And this is my prayer: that your love may abound more and more in knowledge and depth of insight" Phil 1:3,4,9