Should we tell Grandma to get lost or just suggest supervised visits?

My fiance's mom has been watching both our toddlers (both same and less than a year apart) and we have recently discovered that she's been playing with my fiance's kid and not letting mine join in. She's also calling my child names and saying she doesn't love or like my kid. And it also appears she's been telling my fiance's daughter to misbehave and not listen to me. She also undermines me in my own home when I ask my fiance's kid to do something (ie: cleaning room or finishing dinner before dessert). And by the way, she tells us that she loves both kids the same and encourages them both to call her Grandma.