She repeats the same story. Any advice?

Neighbor1
I am so sorry your neighbor is having these issues. For a condition you describe to come on suddenly it is often a urinary tract infection. If the condition is long standing it sounds more like a mental illness although some dementias cause hallucinations as well.
it sounds like “the daughter” is seeking medical help and that is the best she can do.
I know many neighbors look out for one another and that’s a good thing.
I hope she gets help soon.

This is a paranoid psychosis caused by her dementia. Nothing you can done about it. Perhaps her doctor could prescribe some antipsychotic medicine.

Beware, the "No good deed goes unpunished" is not just a quirky phrase.
If the daughter has refused the doctor's recommendations for her mother, she will shortly learn that constant calls to the police will earn a visit from APS, and requirement for treatment and placement, on a 5150 hold possibly.

It won't be much longer now, so back away, do not interfere. Stop listening to this very ill neighbor. Unless you see your neighbor fall outside and need to call 911 on her behalf, stay out of it. (BTW, do not pick her up).

Your input into the neighbor's issues will only delay her treatment. imo from experience.

You cared, now stay out of it.

There isn’t anything you can do. If the woman is calling the police and they are going to show up at the door, they will tell the family what the consequences will be if the situation continues.

The daughter + family are in a bit of a pickle. It would be a lot easier if they still lived in their own home wherever it was and convinced the mother to move into a dementia unit. She does need to be checked for a UTI, but if it isn’t that, she may need anxiety medication and to have her access to a phone eliminated.

The delusions the poor lady is suffering from are part of dementia. My MIL has this, but she had them before the dementia really set in due to mental illness. At a certain point, it may become necessary for the police to take her in for an evaluation. They should let it happen and ask for help.

You can do nothing.

Divert, deflect and distract. That's my motto with my mother. You simply have to change the subject even if it feels like you're being rude. Take a deep breath and say, oh goodness where has the time gone, we forgot to call Aunt Helen back...

Advice...
If you are not family. I mean actual DNA, marriage linked family
If you do not have POA
If you are not this persons Guardian
Back off.
What this person does and or says is the families business.
You have given them some information about this site that is as far as you personally should go.
If you think the person is being abused or neglected you can contact APS give information you think is relevant then BACK OFF.

Oh, what causes this...Dementia it can be one or more types of dementia. There can be other underlying medical conditions but...
Since you are not family, you are not POA, you are not a legal Guardian you have no right to this information.

Your neighbor should be checked for a urinary tract infection.

They can cause hallucinations and delirium, they can also increase dementia behavior in seniors. They DO NOT have the same symptoms as young people do when they have one.

Such a difficult situation for everyone involved. Hopefully, you can be a help to the daughter during this time. Friends are so very important for the caregiver.

Well for my wife she was irritated and wake at all times before I couldn’t handle her walking out, angry and just darn hard to care for. Meds helped but not to the extent I needed. I had to put her in a care facility. But there were preventive measures I took before that, like taking her phone, disconnected the battery on her car, and interior child safety door handles.
it seems it maybe time to take her out to dinner, and then to a facility. There’s no excellent facility out there BTW; but some are better. They all make this sound good but the reality of these care facilities is they are there to care for your loved one with a profit right in their face.
after three years of my wife in two facilities, I have brought her home now and have caregivers in my house for 9 hours a day while I work.
I found two caregivers who are excellent in their field. It’s hard to care for so many people in those facilities for one person, though they wish they could.
Hope this helps

You are just a neighbor, so this is her family's responsibility. I do hope she gets help before anything becomes dire. If it appears worse, check in with APS.

Neighbor1: The diseased mindset of purchasing a gun by an individual with dementia is a scary ideology.