Extremely nosie neighbor! What can I do?

My neighbor is only two doors from my dad's house and one from my mom's. I live at both places. Her name is Sarah, and she is an elder. She is also my great aunt from my dad's side. Here is the problem: my mom had her friend Peck over yesterday. He is a nice, black guy, and wanted to give her something (I can't remember what it was). Peck and my mom were outside in the backyard talking when Sarah came out spying on them. Then she shouted, "WHY IS THERE A BLACK GUY IN YOUR YARD?! EVERYBODY LOOK! DO YOU SEE A BLACK GUY?! WHY IS SHE TALKING TO A BLACK GUY?!" What she did pissed me off. That was so rude! Not only did she do that; she also peered into my other neighbor's house at night, she walked right into my dad's home without knocking, she watches me and my friends when we go swimming and complains we aren't wearing any clothes (she doesn't accept anyone wearing swimsuits because it's considered being naked to her), she asks about everybody and what they are doing, and she reports whatever she sees to the whole neighborhood! Her brother (my Uncle Jimmy) was the mayor of the town until he died a few years back. Even he couldn't keep her from causing trouble. Everyone is getting ticked off at her. They tell her to stop but her defense is, "I never did that! You're lying!" I swear all she does is cause trouble! I don't know how to end this! Could anyone please help me? Thank you.