Is the wife required to return the entire dowry (jewelry, gifts, and clothes) to her husband if she requests a divorce due to problems with his family and wishes for reconciliation, while her mother-in-law refuses this and demands the dowry?

You have done well by refraining from mixed gatherings. Your husband's mother has no right to order you to sit in them, for refraining from what is unlawful is not extremism. It is not permissible for a woman to seek divorce unless there is a legitimate Shariah reason, and divorce is in the hands of the husband. If it occurs before consummation, the wife is entitled to half the Mahr; otherwise, she is entitled to all of it. The jewelry (shabka) is either a gift, in which case the wife owns it, or a part of the Mahr. It is advisable for family members not to interfere between the spouses, and the husband is not obliged to divorce his wife at his mother's command unless there is a legitimate reason. The wife has the right to an independent dwelling, and if reconciliation is not achieved, she should ask Allah to grant her someone better than him.