Would you feel the same way if it was your mother that bought the outfit and not your mother in law?
I have 5 children....all grown and married with children. This makes me a MIL to 5 also. My 3 daughters come to me often for advise, to vent, for help, etc. They would have no problem if I bought their children outfits. But my 2 daughter in laws are a different story. They go to their mothers. Understandable. Why wouldn't they? I'm not their mother! But I sometimes feel left out because of it. I get 2nd place! Oh sure, they call me once in a while for advise, help etc. But that's usually only when the problem/subject is their husband (my son), not the grand children.
Don't get me wrong, I love my daughter in laws and they love me. To me they are also my children. But in reality I know I am just the MIL. Not their mother. And that puts me in 2nd place.
Please don't think your MIL is trying to run your life, she may just be trying to move up to 1st place once in a while. Dress your daughter in the outfit MIL gave her and be sure to mention to others who bought it for her. And if some where during the day you feel a need to change her clothes, that's fine. MIL had her 15 minutes of fame. LOL