Start taking steps to develop your resume, your network, your marketability and an overall strategy that you can follow. The more you control your career, the more you will control your nervousness. She manages by threat and intimidation. She gives us a performance appraisal and shows us our errors, but does not credit us for anything we do right. Even if you and your associates are making tons of errors, an approach that constantly points them out is not management.
Effective management implies coaching, constructive feedback, and two-way communication.
The next time that she gives you negative feedback on your performance, ask for specific guidance regarding the steps you should take in order to improve. Be sure to apply these steps on future work. This will make it far more difficult for her to criticize you, because doing so will cause her to criticize herself as well. In addition, in this age of open communication, you and your associates should also consider discussing your supervisor's leadership style with her. The discussion should focus on the ways that she will profit by establishing a more balanced and communicative working relationship with all of you.