I can tell you from experience that yes, this can happen but only because your PTO-executive officers are not getting the word out to members of the PTO.
This recently happened to our Parent Teacher Group. Not only did our then PTA President not follow PTA by-laws, she also spent all the money from PTA accounts and declared the PTA a PTO without informing the PTA members. The President also decided to spend even more of the organizations money on incorporating the PTO, thinking that this would protect her. These simple infractions of the by-laws lead to the most stressful year for parents. Members were not "allowed" to discuss the situation at all in the fall. This outraged the members who eventually voted out the entire executive board.
Now these new officers have to start from scratch to re-build the parent-volunteer base and the first line of business is a PTO website.
Communication is the best medicine for these types of problems!
PT Group's are inclusive organizations, not exclusive "clubs."
Good by-laws and the use of Robert's Rules of Order at meeting really helped our group.
Your president has probably drifted into this one-person PTO with the best of intentions. Her methods are misguided, but she probably has worked hard and put forth significant effort. So if there's a way to at least try to give her some credit for that while moving forward as a group, I'd encourage you to do so.
You definitely need to develop your organziation as a group effort, but if you can do it without causing a major rift everyone wins. If that's not possible, at least you tried.
You guys don't have a PTO. Really-I think you all should come together; talk to the principal and say enough is enough then schedule a meeting, elect a board (with or without her as the president) and set up a by laws committee. Then you can move forward as a true organization. Right now you have a dictatorship---You can of course attempt to include her "Madam President--some energized parents are holding a meeting Tuesday night to elect the compliment of the board and set up a by laws committee. Is you intent to run for President of the group?"
Our PTO has had the same president for the past 2.5 years. She has never held official meetings for the parents and has never had elections. She continues to elect herself year after year. There were by-laws before her, but now they have "disappeared" . The principal is requesting she write them up and submit them, but she continues to stall and put him off. We ask for meetings everytime we see the Pres. and her answer is always ... "oh yes, that will be announced soon." But she has never had one.
We are all frustrated and want back in our school (we were a very active PTO before her ... about 20 of us want back in) ... what do you suggest?