G.D.
Well, first I'd suggest trying your best to act as an adult. Just by using the name monster in law states that there is a lot of tension from both of you in the relationship. I also don't believe someone can turn people against another person, and if you feel like that's really happening- then you'll have to use appropriate behavior to make peace.
I see that most people do not handle confrontation well. Who wants to tell someone that they're not doing a good job or that they are rubbing you the wrong way and how do you do it among those people who will be involved in your life?
I feel respect for someone who can confront me about something I said or did to make them feel ill feelings towards myself. I can have a conversation about it and learn from it.
Potentially inviting your mother in law over for some tea or lunch while kids are napping or outside playing could make her feel good and in turn can give you an opportunity to let her know kindly that you'd like to clean the air.
Obviously the kids are your (and your husbands) ultimate responsibility, so when she gives you advise you don't care for, you can kindly thank her for the advise and let her know that as the parent you'll think about it, talk to your husband about it and make a decision about it. If that's too much conversation, you can always just thank her for the advise and change subjects fast, keeping in mind that at some point in the future, you'll need to have the direct conversation to clean up the relationship.