Children need well defined parameters. Being overly permissive and sending mixed signals to a strong willed child is a minefield. An eight year old who 'rules the roost' so to speak, will get overwhelmed quite easily because the roles of adult and child eventually become reversed. Not sure why that's happening, but you are not alone.
My own granddaughter just turned ten. My daughter can't do enough for her. She has dance, riding, figure skating lessons, she has clothes, she has toys....everything a little girl could wish for, yet she calls her mother names and is very disrespectful towards her. During our last holiday visit, I stepped in, and she yelled at me to 'shut up'. After we came home, there was another row and my daughter called me in tears. At one point, GD threatened to run away and even shoved her mother aside. This seems to be how many children behave these days.
After their last screaming match, my daughter is now seeing a therapist to help sort out her relationship with her ten year old daughter.