My mother is showing her wicked behavior. What do we, as a family, do?

Sounds like you care for you neice and her well being. Invite your neice out (sooner than later) and have a frank discussion about the incident; hear her out on her side of things and then explain about her grandmother and that is the behavior as grandparents age and part of the aging process/disease. Then talk non-confrontationally to your brother and tell him you understand the stress and remind him he has a good kid and the stress is hard on everyone; but particularly grandchildren who may have different memories or truly love their grandparent and this is an extremely hard adjustment.

My boys and neices are grown and young adults, yet I try to protect them from the "bad" behavior and insensitive remarks from my mom who has dementia. I have been very honest with them all about the hardships now and her dementia and leave it up to them to visit or not visit. I see no reason for them to be burden with worry and stress of being faced with someone they no longer recognize as "Nani". I'd rather they remember her as she once was and the good times they shared with her.

Your profile says you are caring for your mother, but your post states she is living at your brothers. Does it mean you help your brother with your mother in whatever role you are able to contribute? Adjustments are very difficult for families, but your mothers behavior needs to be addressed or it will only get worse. Your niece should not be involved in these tensions. She will end up hating her grandmother and possibly lose respect for her father.

So, she is there to stay? I think this situation will only get worse; especially for your niece who is at the delicate, impressionable age of only 16. My MIL lived with us and my youngest at the time was 17. She was not wicked by any means, but extremely difficult. I had to keep my MIL as far away from my daughter as much as I could to insure that she could have no influence over my sweet girl. It was extremely stressful; but my daughter came first.

Do hope another situation can be found for your mother as I fear what has already occurred is a preview to coming attractions - that will be harmful to your niece.

Thank you for your answers. My niece is 16 and, I agree, my brother overreacted. Tension is high in their home since my mom moved in. It's only been six weeks and she is demanding and manipulative. And she is there to stay.

Another battle axe. Does it ever END?
Jump in and speak up for that child and make the old broad apologize.
If she refuses to apologize, please explain to the little girl about her personality disorder. This is emotional abuse. Disgusting'

Did granddaughter explain how the event really happened? Did Brother ask his mother? Mother indeed seems wicked. Brother -- can't tell from what you've said, but I'm not ready to pass out gold stars for parenting skills quite yet.

Were you there to observe this? If not, who gave you the story?

To your title question, as a family, don't let Mother get away with this behavior. Sounds like Brother played right into her hand. You kids need to get together and decide how to present a united front against Mother's wickedness.

Is the plan for Mother to stay with Brother, or will she be moving out at some point, perhaps after treatment is complete?

i dont think kids should get in " tremendous " trouble. i always tried to downplay their trouble so they didnt have to hide anything from me. shoulda trusted the kid a little more. i cant see past the overeactive, explosive dad here. moms bs is secondary imo..