To reiterate what Zoelula stated, besides watching sugar in your diet-- your wife also needs to watch carbohydrates (starches) carefully too. Things like white flour breads, potatoes, pasta, crackers, etc. can cause a drastic rise in your blood sugar if you aren't careful. (They are converted to sugar after you eat them.)
Other foods/drinks need care too (example- milk, fruit, fruit juice) can also cause blood sugar to rise (so serving sizes and moderation are important). I'm NOT saying that these foods aren't allowed. What I AM saying is that your wife needs to use care and follow the guidelines for diabetics.
An Endocrinologist is a doctor who's primary medical study was the endocrine system. This is where diabetes wreaks havoc. Go (your wife) see one and discuss medication options. Then go see a diabetes nurse, or a nutritionist-- they can help her a lot with nutritional guidelines. (Serving sizes, and how many servings of each type food that's safe.)
You don't say if your wife was stable with her glucose readings for awhile and if they are now creeping up. Diabetes, unfortunately, is a progressive disease, so if that is the case she may need to see her doctor for a change in her medication.
When you say she "watches her diet" what do you mean? There is a lot of misconceptions about what affects glucose. Sugar is certainly a big offender that needs to be avoided, but high carb foods like bread, rice, potatoes, etc will also spike blood sugar. If she is eating fairly low carb, getting regular exercise then it might be time to look at the meds. How long she has been diagnosed is also an important factor.