Ask her to contribute to a charity you like as her Christmas gift to you. Tell her that's all that you want. Make it an issue pretty serious to you that you know about, so you can talk about it from the heart, and that you would genuinely be glad to see her contribute to so if she does bring it up all year you will not be sorry to hear that she did it. Give her the whole story of how the shelter needs new beds, or the spay/neuter clinic is doing such thoughtful work with the feral cats, or the Habitat for Humanity houses are needed, and when she brings up her largesse and bounty throughout the year, tell her you know the shelter was SO GREATFUL and ask her to go with you to visit it. This might be somewhat hard to carry off, but if you do it, you actually might turn this whole strange dynamic into something good. She might get interested in the charity, and become a better person for something vital to do.
Hi. I wouldn't make the gift giving your focus. I'd make the rest of your relationship your focus. So, accept her generosity (or at least I would). Don't insult her and act like you don't want anything, etc. However, this is the least of your issues. That you have blow out fights is the problem in my mind. Hon, I say this as a stubborn, hard nosed woman--- so not judging or picking, but it takes two to be difficult. Your views of her as manipulative and demanding and miserable are half the problem. Rather than just accepting her quirks, not taking it personally, etc. you choose to fight her or not like her for how she is. She raised your husband and he turned out alright, so she can't be all bad. I spent a lot of time disliking my mother in law. She sure gave me plenty of reason. But I would never argue and fight with her. And really, once I started to look at her as this funny character in the world who was so different than me but still a human with a right to be as she is and flawed--- I could accept her and what she did much better. Without anger and angst.
That's what you should focus on. How to become more tolerant of her personality. THAT will make things better. And let's be honest, and again, not judging. But telling her you don't want a gift because it is awkward and meaningless to you is a good way to 'stick her' where it hurts. On some subconscious level, really--- that could be going on. Don't do it. It will hurt her and getting presents is not so difficult, is it?
I understand wanting to be authentic but at the same time, you need to make a peaceful family which includes accepting your husband's mother. good luck