Podding weeblewobble and gramma dishes. If you block her emails and facebook, then it won't matter if she starts drama because you won't know about it. Let her have her drama with the rest of your family while you live in blissful, blissful ignorance of it. Seriously, what could she possibly do to you that is worse than she is doing now?
Your family seems to have some kind of twisted dynamic where someone has to be the bad guy. Now that your brother and his DD are not, that role has been filled by you. (I'm curious - did they used to say similar things about them as they are now saying about you guys?) The only way to win that game is to not play.
So, personally, I would cut off all contact with your sister. I would contact your DD and let her know that you hope it will not affect your relationship with her but you are no longer going to have contact with the extended family. And honestly, DD has reached adulthood and at some stage will have to decide whether she is going to buy into the whole toxic mess or walk away clean. Modelling good behaviour and self respect in this may be the best parenting choice you ever make.
Yes, they did so similar things with my brother , his wife and their DD. Their whole family drama started about 15-16 years ago. My parents, brother and his family , older sister and younger sister were having Thanksgiving at my parents house. My mom (and step dad) are (and have always been as long as I could remember) functioning alcoholics. They have great jobs, don't drink on the job, they just come home and drink. Dad would go through a 6 pack of beer a night, sometimes more. Mom would come home and have two glasses of wine while cooking dinner, two glasses during/after , then start on the bourbon or whatever else. Because of this I refuse to drink at all. So mom was tipsy or drunk or something when she decided to give niece (who was very young at the time, maybe 3?) a piece of turkey that had a bone in it. My brother got very upset and yelled don't give her that! Mom yelled back and stormed off in her car. She didn't come back until after my brother's family left. After this incident , mom never apologized , and bad mouthed brother for years. She would not visit him or his family for years, dad went by himself. Dad would come back from the visit saying Niece is troubled or niece has this or that issue, that the family would pick apart and analyze. They wouldn't dream of 'recusing ' niece though. Her personally is loud and boisterous and not easily swayed. My DD on the other hand is quiet and used to be easily swayed. Plus she admired my younger sister and thought everything she said was gold .
I hope my DD will realize how toxic it is over there but somehow I don't hold out hope. I actually think that this new drama will make me look worse in DD's eyes, at least in the moment, because sister will spin it that I am not trying with her . And in a sense , walking away from sister , is NOT trying, I just am not sure DD will understand the real reason since she doesn't see how they are over there. Yet.