I went through this same thing with my grandmother. As said previously, if you do not have power of attorney for her, do so as soon as possible. It will make things easier when you have to over-ride her decisions, both legal and medical. Her doctor should be authorized to revoke her drivers license. Not sure of the exact procedure, but he should know. He also has a moral obligation knowing her mental state and that she is still driving. Let the doctor be the bad guy, not you. You need to let her think you are still on "her" side, until she is too far gone to even tell the difference anymore. It will make things easier down the road, as things will only get worse from here.
