Our expert says:
The only way to get a useful answer would be for a proper direct assessment of her, both to be sure this is dementia, and to clarify if possible ( its nopt always clear ) what the cause might be. Some forms of dementia can be related to other physical illnesses which can be effectively treated and reduce or remove the apparent dementia - such as some forms of thyroid disease. Vitamin deficiencies can at times disturb one's mental state and can be remedied.
With forms like Alzheimer's, there are not some drugs available which though they don't "cure" or even prevent the illness, do seem in many cases to usefully slow it down, and make the situation more manageable. There are also some meds which help make the person less suspicious and agitated which can be useful, though they have become controversial with some evidence that they might increase the risk of stroke in old people taking them. Then one has to balance potential benefits and risks.
I'm not sure that particular bizarre stories you;re thinking of checking with the family - it sounds as though there are enough definitely odd things you can yourself confirm as inaccurate or odd, not to need such checking. You're right that its valuable to avoid her becoming suspicious of you, as your ability to be helpful to her would be impaired if she had good reason to believe you were going behind her back
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