She sounds extremely overbearing but it also sounds like the situation is being corrected as we speak simply because it's reached a stage where you find it intolerable and can't stand any more of it.
These are very young kids and there are plenty of other moms. I think a five or six year old would be pretty happy to play with just about any kid. You really don't need to be locked in with Ms. Cruella DeVille or feel like your little kid's social life is doomed.
So, I'd just act like you don't even know her. As you've already decided, don't attend anything she's hosting and don't get involved with any ride-sharing with her or her child or anything beyond a polite "hello" in passing, if you run into her.
I'd focus on the other mothers who are tired of her too, as well as other mothers (and their kids) outside this group. Invite another kid and mother or a couple of them to your house for coffee, a play date or whatever. Expect a stupid little flare up from her or some kind of petty revenge but remember there's not much she can do to you. If she tries, show her that you're not an easy target. Go to the school or even the police, if it becomes warranted.
As I believe you mentioned, it's a very good idea to protect your child from mean and weird adults anyway. Their approval isn't needed; their absence is. You may well decide you don't want your child at any of her parties anyway. If she isn't invited to something and it makes her sad, just take her and maybe a friend or two to something fun instead. There's no one activity or group that is necessary, especially when it's offered by a cow.
I expect it won't take long before you're simply not in her orbit anymore and will have your own, separate group instead. When you don't offer her anything, won't associate with her and are careful not to talk about her (because you never know who will tell her or tell someone else, who might tell her) then you will soon become strangers again. She'll move on to people who are more fun to pick on. Good luck to you. I know this is the last thing you need when you are still recovering from brain surgery!