I have a sister similar to the one you describe OP, although I feel mine is more HPD then NPD.
Over many years I reduced contact with her and was happy with minimum contact achieved 2 1/2 to 3 years ago. For about 12 months we managed to be civil, then one day she came to my house and started putting my children down to make her child appear 'better' than mine, she is a master at sarcasm and the "I was only joking......." comment. Hmm, I thought and gave her the benefit of the doubt, as usual, fool that I was.
Next, I received an attack of the emotional blackmail type, but it was very overt this time. I think she knew she was losing her grip on me and this was a last ditch attempt to make me 'fall into line'. (I was really cross at the time that she thought I was such an idiot as to fall for her emotional blackmail it was sooo overt! How thick did she really think I was? ) Anyways, I think instinct to protect not only myself but my children from any more abuse, manipulation, deceit and general emotional vampirism must have kicked in big style. I ended telling her exactly what I thought of her treatment of me over the past 40 years! I really did let rip!
After that there really was no going back. I am now 18 months complete No contact.
My parents do not discuss her with me, at my request, all cards and presents are returned unopened, to accept the presents and cards gives her access to my life and she isn't worthy of being in my life imo.
I have to phone my parents for her address as I have no contact details for her at all. I have changed my phone number and the childrens phone numbers, any e-mails from her are deleted before they even reach me. At present I am waiting for the Xmas cards to the children to arrive so I can return these too, there is great satisfaction for myself, in putting these cards in the post box unopened marked 'return to sender'. I see it as part of my job as a parent to protect my children from known quantities that may harm them and that includes protecting them from being emotionally abused by my sister, hence me including my children in the 'No contact' arrangement.
I am finally in control of my own life - my sister and her made up dramas ruled my life for such a long time - it feels fantastic to be able to visit who I want, when I want without her tagging along to put herself in the middle of all and any relationships I have and ruining them with her gossiping and slander. I am finally free to live MY life as I want.
What you do about your sister really does depend on how much of an impact she has on your life and how much you are willing to put yourself through to find your 'peace', this maybe just having minimum contact. For me 'No Contact' is where my 'peace' is. It wasn't an easy journey by any means but was definitely worth all and every single bit of heartache and soul searching along the way.
I wish you all the best in making your decision, whatever you choose will not be easy but I so hope you find some sort of peace somehow. x