Still confused and unsure and it's hurting everyone

[Versant]

Is it not YOUR home as well? Do you not have a right to invite YOUR family into YOUR home?

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I would say that this actually strengthens your case for having your sister over to your house for the event. If it were on neutral ground at a rented venue, then your wife could make a bunch of noise about having a "right" on who to invite and who not to invite. However, in YOUR home, she does not have the right to tell you to keep your family away. Period.

Thanks. Helps a lot to have confirmation that that position is a reasonable one to take.

This behavior is directly attempting to alienate you from your family of origin...without any reason other than irrational dislike of your sister.

That's the thing: my wife is adamant that it's nothing to do with dislike and everything to do with my sister mistreating her. It's just that the "mistreatment" most definitely doesn't deserve that name, and in any case is mostly just healthy person reacting in shock to an unstable person acting out. The thing is, in this matter and many others, when my wife holds such a belief, the only way to argue her actions are wrong would be to challenge her grasp of the situation, her understanding of other people's actions and motivations, and that pretty much amounts to "you are delusional in this matter", which wouldn't go down very well.

This can be described as a Boundary.  Though it may go over better if you state it as OUR home.

Still, you will likely face resistance to a new boundary.  Read up here on extinction bursts which are attempts to impel you to retreat to the prior status quo.  How massive the pushback will be will vary from person to person.  This one may be "the hill she is willing to die on" or maybe not.

I expect and fear she's willing to go to any length to get her way. We'll see. I've been wrong about her reactions many times before.

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When doing this (inviting my sister and letting my wife know I've done it), what not to do and say?

[Versant]

Made an overture with the "let's give my sister a chance to apologize" plan.
My wife refused to look at my proposal, claiming (correctly, but also a bit unfairly) that I'm thinking about the naming ceremony and inviting my sister there, I'm not aiming to make her life better. She declared my sister's not welcome and there's no need to look at how to let her correct things.

So, things this far are going about as well as one would expect. I remained calm and kind and will see if she reconsiders later, but it doesn't look promising. Probably going to be plan B then (plan A in all honesty) and just inviting who I want anyway.

[Versant]

When doing this (inviting my sister and letting my wife know I've done it), what not to do and say?

I mean, seriously. I feel alone and out of my depth. I feel like a child pretending to be an adult. Or maybe like I had been put into the cockpit of a plane and told I'm expected to land it, no one seems to realize I'm not trained for this. Any tips are welcome!

From what I've read, I should not argue, just state what I'll do. Presumably also why? It would feel absurd not to give any reasons. After giving the reasons I just need to make sure not to discuss them further not to be drawn into argument or trying to justify myself. Right?

It would make sense to have some likely scenarios planned out to some extend, too. If/when she tries to cancel the event in response, then what? Tell her it won't change the fact that our children will get to meet my sister regularly from now on? Try to have the event anyway? This is really hard for me to figure out, I really have poor understanding of what I can do, what I'm "permitted" to do. And what she's can't do, and what I can do to stop her from doing those things.

[HurtAndTired]

It's quite simple in theory, but more difficult in the execution. Your wife is currently in the driver's seat in your relationship. This is not a safe place for a person with a severe mental illness to be. As the mentally stable spouse and parent, you have an obligation to take the wheel away from her and drive. She will not like it and will throw a tantrum, but you must not fear that. Like a toddler, it's what pwBPD do when they don't get their way in order to manipulate/regain control.

How do you do this? Take charge of the naming ceremony. Make the plans, pay for the supplies, make the guest list, etc. If your wife doesn't like it, she can do something else while it's happening. You are an adult. You don't need her permission or blessing to do anything with your children and your family members. You are afraid of her, and that's what's giving her leverage. What if you were no longer afraid? How would she control you if her threats and tantrums had no effect?

Learning to let my wife rage and to let go of the idea that anything I say or do can stop her from going off the rails freed me. I also stopped caring if she was angry. I called her bluff on divorce threats. I called the police when she got physical. It shifted the power dynamic in our relationship. She now fears me leaving. She feared this all along, but covered up her fear with bullying and anger to try to feel like she was in control. Being back in the driver's seat of my own life feels great. It's where any adult should have been the whole time. Plus, being the captain of the family ship ensures my S4 has more stability and sanity in his life. You owe it to your kids and yourself (heck, even to your wife) to do the same.

[Versant]

You are afraid of her, and that's what's giving her leverage. What if you were no longer afraid? How would she control you if her threats and tantrums had no effect?

I guess this is they key.

At the moment I am very afraid. If I am to do this, and I feel I must, I need to tell her tomorrow I'll invite my sister. I was thinking going with "I am going to invite my sister. We can try to figure out how to make it as comfortable for you as possible."

To keep from chickening out I'm trying to keep things in perspective.
The event is important, but that doesn't mean I shouldn't risk it getting ruined by making a stand. It's still just one event and this is just one year, a tiny part of our lives.  If I let my wife have her way, it will be ruined for me and my relatives anyway, and I can't let that keep happening. And if she becomes unstable and things get crazy... That's out of my control, and I can't let fear of acting out stop me from making steps to better our lives. And if this escalates into a marriage-ending conflict? Then the marriage ends, and probably everyone will be better off for it.

I just wish there was a way to do this without her feeling like I am dominating her. There just doesn't seem to be a way. She will see this in the worst possible light.

Sometimes I wish I didn't know how she sees things. Just today I was reading a book about recovering from a relationship with a narcissist - a lot about the unhealthy dynamics etc. apply to BPD relationship, even though not all - and with all the descriptions I can't help but to run two checklists in my head. One for the things that apply to her, and another for the things I know she thinks apply to me.

In her head she is living in a relationship where she is being controlled, manipulated and emotionally abused. There are red flags like "the narcissist always seems to have a convenient explanation for everything" and she keeps throwing this in my face. And it's true, I do tend to have an explanation for why the things I say and do are not malicious even though she thinks they are - but not because I am a narcissist (to the best of my knowledge) but because, you know, I am actually not a malicious person.

[Versant]

Just realized my in-laws are coming over already for the event. Once upon time I would have been happy for their calming influence and their acting as fairly moderate, constructive voices. Not so much any more, got a pit in my stomach when I realized, it's been quite different since last summer when they suddenly took sides with my wife and were quite aggressive about it.
Oh well. Can't be helped, and I'll survive one way or another.

[Versant]

Ok, I told my wife I'm inviting my sister, she objected, got upset and furious.
I invited my sister, my wife sends a message to her declaring that if she turns up and tries to enter our home, she will call the police. Blames me, she says I know she will carry out that threat, so it will be my fault if that happens in our child's naming ceremony.

Not sure what I accomplished. I'm kind of surprised if my sister takes the invitation with my wife threatening with the police. Also burnt any goodwill there might have been with my wife - though, not to fool myself, there wasn't probably any to begin with, just the illusion of calm.

At the very least, I guess, I was on the side of what's good and right, even if that is purely symbolic. Don't want too many purely symbolic gestures though when the children might get caught in the middle of the consequences.

[HurtAndTired]

First of all, congratulations on taking a brave step! It WILL get easier, I promise.

Secondly, some reality checks. Your wife has NO LEGAL GROUNDS to call the police on your sister. She is an invited guest and is not trespassing. One spouse does not have "veto power" to uninvite the other spouse's guests unless they are causing a disturbance or otherwise engaged in illegal behaviors. Your wife's threat is a childish tantrum and an attempt to control you. Don't take the bait. Just let her sit and fume.

Next reality check. There was never any goodwill or peace, it was just you letting yourself be steamrolled to your wife's whims. That is neither goodwill nor peace. It is capitulation. The only thing you have burned is the illusion that there was no conflict. The reality is that there has been deep conflict for quite some time and that you have been helping her hide it. Drag it out into the open light of day. Only then can you face it and deal with it constructively.

If you keep doing what you just did, you will start to get your life and independence back piece by piece. It will take time and hard work, but do not turn back. This is the first day of the rest of your life.