Does my mother-in-law cutting our clothes in a way that caused tension between me and my husband count as an act of sorcery, or is it merely psychological harm, and how do I deal with her to avoid her harm?

The default is that the husband's mother is innocent of the accusation of causing harm, so it is not permissible to accuse her of cutting and disfiguring clothes without clear evidence. If that is proven, it does not necessarily mean the cause is magic. It is obligatory to advise her and warn her of Allah Almighty, and the husband must repel her harm from you. The wife has the right to request a separate dwelling. If it is highly probable that the harm is due to magic, then you must perform legal ruqyah. It is advisable to calmly discuss the matter with the husband, without accusing his mother, and to seek out the malicious person causing corruption.