You're absolutely right, everyone does just go along with them, my mum's exactly the same.
I think people close to the N go along them because they don't want to deal with the inevitable backlash. It's so much easier to just cave into their demands than to be on the receiving end of their wrath. You and I both found out the hard way what happens when you stand up to them, but few family members are brave enough to take a stand. My father would always give N-Mum what she wanted because it wasn't worth two weeks of the silent treatment over something that was usually very very petty.
As for those outside the family, maybe it's just in everyone's best interest to give in to someone who is being difficult. If you have 20 people at your office, and one person says they hate Italian food, why bother fighting with them when you can just agree to get a hamburger instead. The N will see it as a major victory, but to the normal mind, it's not worth a second thought. People would certainly find it odd to see an adult having a tantrum over something so trivial, but I think it's human nature, or maybe just a matter of politeness, to simply comply with that one difficult person in the group rather than argue with them. People outside the immediate family won't realise what a HUGE win it was for the N, and unfortunately they've just given her permission to do it again because it worked!
