NO. God, why do women get like this with other people's children? Controlling behaviour is controlling behaviour, regardless who does it.
Assertiveness techniques:
The three part sentence - I understand that ... However ... Therefore.
"I understand that you want our daughter to sleepover. However, we don't want that. Therefore the answer is no."
She may try to grind you down - going on and on and on, prodding you into coming up with reasons why, knocking them down, criticising you until you cave through exhaustion, so:
Broken record - "As I say, the answer is no. As I say, the answer is no". And keep repeating that, in the same language, no variation that she could seize on and shake. Let her be the one to try to wrangle and twist words.
And go grey rock - saying your no in a dull calm unemotional tone of voice and expression. Upsetting you seems to be her little game. Let her be the one to have the tantrums.
Beware flying monkeys - her sending others to try to wheedle you into it.
And beware undermining tactics - her saying things about you to others behind your back.
Same techniques.
Have your statement to them ready, such as "Sadly MIL has developed something of an obsession with trying to force us into allowing a sleepover. We have told her repeatedly the answer is no but she has chosen to disrespect our wishes. It's a shame but people can become difficult as they get older, can't they!"
Get used to all these techniques and being prepared to deploy them.