Geez Noon, you got it rough. I feel for you and your family, especially for your niece, poor child.
Honestly, moving out with her was probably the worst thing you could've done. I know you were trying to be helpful but encouraging her bad behavior isn't helpful. She's an adult so you can't really force her to do anything she'll just have to ride it out herself, but you can do something for her daughter. There are laws against child abuse and neglect.
I think it's good that you're moving out, maybe she'll finally get the reality slap in the face she needs to wake up and realize what she's doing is harmful to herself and her daughter. I'm going to be blunt, from what you've told me she's an unfit mother and if the authorities catch wind of her behavior she will lose her daughter. The best thing you and your family can do for her is show her tough love and that's to let her make her mistakes because apparently she didn't get that out of her system when she was a teenager. People learn from mistakes, well smart people anyway.
If she's smart she'll see the light of day and realize how she's behaving is not only bad for her but for everyone else, especially her daughter. Don't even get me started on the sick guys out there that she could be bringing home and exposing her daughter to. If she's smart she'll move in with your parents, find a job and focus on loving herself and taking care of her daughter. She's 26, still young yes, but way old enough to know better by now. Once you have a child your child needs to be your first priority.