But sister, what is the method to let USCIS know that she will not take english test? Do we have to send another application for that or just let them know on te interview date?? And what if my mother in law is totally illiterate and cant even take the covics and history exam in her native language?
You can ask them the day of the interview. It is at the officer's discretion.
Also, it is possible to file the medical waiver on the day of the interview.