Why is my wife going crazy and controlling about our daughters egg allergy?

Your wife is operating from a position of fear.

Time to talk to your daughter's pediatrician and ask how bad the allergy is (a few hives, or life-threatening?) and if it's expected to get worse. Are there any ways to increase her tolerance to eggs?

Ask if you (all of you-- you, your wife, and the grandparents) should carry Epipens and for God's sake learn how to use them and know it cold so you can act in an emergency. If and ONLY if the doctor says you should carry them.

And while you're there, ask about future shots. I worked with a woman several years ago who was allergic to eggs. She could not get a flu shot because the vaccine growth medium contains eggs. I don't know if it's just the flu shot, so ask (and if your daughter can't get flu shots, I hope that your family will, to help protect her).

Your wife understandably doesn't want your daughter to be uncomfortable and of course no one wants the girl's life to be threatened.

But find out if a little egg exposure means you have to immediately go to Defcon 5. And maybe you do. If that's the case, then everyone carrying an EpiPen should give your wife some peace of mind. And when your daughter is old enough to understand, you and the pediatrician can work on teaching her how to use an EpiPen.

And if you don't need to go to Defcon 5, your wife is far more likely to accept that from the pediatrician than probably anyone else.

I think if your parents were dismissive of your daughter's health concerns, she might have a point, but it sounds like that is not the case since they are asking for your permission. I don't know when you found out about the allergy, how severe it is or how old your daughter is and all of those are contributors to your wife's concerns. It sounds like you are on board with protecting your daughter so I agree with you, you have the authority to clear food for your child. I also somewhat agree with your wife that you need to be extra vigilant around people who do not live and breathe your food restrictions, at least until your daughter is old enough to know not to take food without significant thought.