I don't know if I would call MIL a "pathological liar", but many things come out of her mouth that just aren't true. I believe that for some reason she just makes these things up in her head and believes them to be true. It could very well be that she knows exactly what she's doing, but I just think she's bordering on senility.
For example, she once told my mom that my husband had planned to become a minister--that is completely not true. But, she probably thought that was a good idea and "assummed" he felt the same way. And she put in her church bulletin (that she types up) that our second son's name is Alexander, when really that's his middle name. She claimed that my DH didn't tell her that his name was Quinn.
She just didn't like the name. She was also telling people that our first son's name was Christopher because she liked it better than Sebastian. Again 
For example, she once told my mom that my husband had planned to become a minister--that is completely not true. But, she probably thought that was a good idea and "assummed" he felt the same way. And she put in her church bulletin (that she types up) that our second son's name is Alexander, when really that's his middle name. She claimed that my DH didn't tell her that his name was Quinn.
She just didn't like the name. She was also telling people that our first son's name was Christopher because she liked it better than Sebastian. Again 
. Everyone in the group knew it was a lie and basically looked around at each other rolling their eyes, no one said anything and he finally walked away. All his stories go in that same fashion, he sees someone and tells them off and then almost gets into a fight. He makes for interesting get togethers because you never know what he is going to come up with
After a little spittin and sputterin she said her meeting was cut short and instead of going to the party late, she just went to the bingo hall instead
