From seeing her behaviour, I'd suspect that the "psycho" mother is suffering from some form of mental illness; she has obvious control issues, which at home she uses the older daughter to enforce upon the younger daughter, who is obviously not happy with the situation.
She also uses her very deep seated beliefs as both a crutch and a weapon; anything that makes her uncomfortable she can dismiss as "evil" and "dark" because God told her so. She then can retreat into her own world, where she can feel both superior and safe, while praying for the souls of others.
FYI-I am not bashing anyone with deep religious beliefs. Do not take this as anything more than it is, it is not a blanket statement equating religion, however fervent, with mental illness. In this woman's case, it just seems to manifest itself that way, while some people turn to drugs, alcohol, food or sex.