My eldest DGS was very premature and in NICU for weeks before going home, still with a feeding tube. For a very long time DD was so possessive, she didn’t even like her DH holding the baby. And through his toddler years she absolutely dreaded him enjoying the company of any other adult, because she perceived it as a threat that she may not be his favourite person. I used to have him one day a week and she used to wind him up, stretching out her departure for work, almost smug at his clinging and tears because it reassured her that he really didn’t want her to leave him. It took a very long time, and me eventually videoing DGS, to demonstrate that he had stopped crying and was absolutely fine within a minute of the front door closing, that we had a happy day together, and it didn’t mean there was ANY risk of him “loving me more”.
It was part of a series of issues around her fragile security, I hate to say mental health but looking back, the prematurity was more shattering for her than anyone realised - the baby was early, but strong and not adversely affected at all. And her marriage didn’t survive the stress.
Perhaps OP’s DD is similarly afraid of letting her child grow positive relationships with any wider family? If only she can believe that the more people truly love a child, and the child is free to love too, the bigger and richer that child’s world will grow.