I don't want to speculate too much based on what little you have said, but the MIL could be in danger of foreclosure if she's behind on a mortgage but I'm not sure if that's true for being behind on taxes.
The adoption thing sounds silly to me. If she can't support both her daughter and GD, then how come she thinks she can support one? Are either of them (adults) working? If so, they may be on the borderline of qualifying for benefits and perhaps that's what the MIL wants to do.
All in all, it sounds like a bunch of nonsense to me, but not only have you not provided many details, but I suspect you may not even know all the details (through no fault of your own).