How do I handle my mother in law?

My Fiance has never left home, until he moved in me. we were together about 6 months and took a leap of faith. His mother thinks I have taken him away from his family. We are expecting our first (my third) baby girl any day now. At six months into the pregnancy we threw out a name we were considering and she took it and ran with it. It had her middle name. Eden Anne, however we sinced decided we wanted something else and she threw a huge fit because she had already told everyone(her extended family) what the name was, the second name was Baylee Rose, One we were both happy with, she has convinced my husband to make it Baylee Anne (her middle name) And that drives me insane! She has had her kids and named them, let us do it. Now I don't even like that name Baylee Rose or Anne because everytime I tell people what we're naming her all I can think about is his mom. We have had things Embroidered with Baylee and so has she. (before the drama) and if we change it now there is going to be more drama to deal with. (his mom told me to my face that because she gave birth to him, and raised him, and loved him longer than me that until she was dead I had to take a back seat to her) Please Help! My family is infuriated that she acts this ways and says to stand up to her, but they also don't have to deal with repercussions of her drama and anger. When they (his mom and sister age 30 who still lives at home with her son and fiance) get mad they blow up the phones cursing and all kinds of crap. My FIance has done a wonderful job at stepping up to the plate, He has bought us a house and completed the nursery and wants to get married asap (his mom told us to wait) My daughters call him daddy and he treats them as his own. He is so different from them and I just don't know how to handle her.