Sorry about your FIL and hope he gets better but remember, he's stayed with her all these years and he's used to the way she acts--good or bad. If she should suddenly change he may think he's dying. A friend of mine had a very bad bout with cancer two years ago and has since told me, "I knew I was going to be all right because you never babied me. You ragged at me, joked with me just like always and that let me know that you knew I was going to be okay." (In reality I was scared that she was going to die but I couldn't let myself show it.)
He's her rock, the person that keeps her stable, she's in a panic because he's really sick and she doesn't know what to do. That's why she's letting you take over and make the decisions. She probably can't change and when you think about it, being so insecure and being trapped by an all consuming desire to constantly be the center of attention is a horrible way to have to live.
Help him, pity her and pray that your FIL gets better because she'll fall apart without him and guess who will be left to deal with her......
BTW, she sounds just like my first MIL and that was one witch of a woman. Good luck.