It seems to me that your DD was doing just fine when she lived with you. She was doing okay in school, had lots of friends, outside interests (drama and volunteering), a boyfriend and a waitressing job (not easy!). Her social skills clearly were there, even if a little different perhaps than those valued by your family.
I think your whole family is very much at fault here, not just your little sister.
The only good news coming out of this thread so far is that your DD is now living on her own with a roommate, so she's at least somewhat away now from their interference and influence. Hopefully the day will come when your DD realizes that she actually had it pretty good at home with Mom and Dad!
I would studiously ignore your sister. She's using your DD and your own vulnerability here to try to make herself feel important. She and the rest of your family have accomplished nothing but making things worse -- for both you and your daughter. I know it would be hard, maybe impossible, but I'd vote for giving the whole shebang the direct cut. (Not your daughter, of course.)