What is the ruling of Islamic law regarding a wife who refuses to live in the family home despite the dwelling being independent, and is the husband obligated to divorce her if she insists on demanding to move to a separate dwelling, especially since this demand might be a result of sorcery or a psychological condition?

It is not necessarily the case that what befell the wife is sorcery (sihr); it could be an ordinary matter. It is not advisable to hasten in attributing the matter to sorcery unless common causes have been ruled out and there is strong evidence. Sorcery can be treated with ruqyah shar'iyyah (Islamic exorcism).

As for the psychological aspect, specialists in that field are aware of it. It is not permissible for the wife to demand another dwelling if she is living in an independent dwelling with its facilities, separate from the husband's family.

Efforts should be made to reconcile, avoiding divorce, and seeking assistance from wise individuals to convince her to stay. If she insists and it is possible to provide a nearby apartment without hardship, then let it be done. Do not rush into divorce until it becomes clear that it is the most suitable option, while seeking help from Allah the Almighty through supplication.