My daughter said these things, mostly unprompted, since the watercolor incident:
"I really wanted to let him paint, because I wanted to see what he'd paint - but I didn't tell him not to spend all the paint, because I thought he knew he wasn't supposed to do that." (You'd think, right?)
"I know I don't have to give him anything I don't want to and I don't have to listen to him. I listen to my grandma (my sane MIL) because she's not like Grandpa N - she loves me and I love her and I like to listen to her."
She gets it. On her own. Wow. That's both kind of scary and kind of reassuring.
Scary because it's so obvious he's not like other, normal people who can love and be loved, that a 5-year-old gets it. And I didn't, for so long.
And reassuring because at least I know I haven't conditioned her not to trust her gut. I must have done something right. Or at least better than him.