If I were in your position, I'd spend the next few months breaking all financial bonds, paying rent, setting up my own phone account, repaying any loans (or setting up a schedule to do so), and saving every possible penny for my future move. It's terribly hard to tease apart the various strands of emotional and financial dependencies that you have been describing.
When you feel it's the right time to tell them, be calm, kind, rational and dispassionate. This may be hard, especially when the hollering or crying starts, but if you become angry, dramatic, or hurt by anything they say, which has been your pattern so far, you'll only make the whole thing harder. Stay above that: keep seeing yourself as a calm, mature, reasonable person.
Be sure to tell them how much you've appreciated their support. Tell them that for you, the domestic situation has been too complicated and fraught with misunderstanding, and so you find it necessary to leave.
Be prepared for the likelihood of hard feelings. If the "conversation" completely dissolves in a storm of emotion, have all of what you want to say written out already, and hand your MIL this letter.
Having followed your side of your family drama, and seen how hard this has been for you, I am still wondering if refusing visits for a year isn't a bit harsh, though. Your MIL obviously adores your daughter, and being a granny who adores my grandson, a separation like that would break my heart. MIL's are people, too. Even the crazy, whacked-out ones have feelings, and probably have something worthwhile to offer their grandchildren.
If they visit, it would be on your turf, and on your terms. Wouldn't that be enough control for you to at least consider visits before a year?
