Oh my goodness....I am so sorry that you're having to deal with this.
From what you write, she does not think she has a problem. Your fiance does not think she has a problem and is, in fact, supporting her thinking.

You see that there is a problem.

She needs psychological help. And I really don't know how you can get them to realize this if they don't see any problem.

You can try to get your fiance on your team. But I don't know how....other than giving him an ultimatum because right now, he's choosing his mother over you

And ps.... What kind of home you "come from" is irrelevant. Don't let him suggest that to you.