No, this hasn't happened overnight. I just put up with Twix's disrespect and let her walk all over me. I'm tired of it now, though.
The horse knows you're afraid of her, and you've allowed her to become the alpha. This is going to take a lot more than lunging to fix, unfortunately. You're going to have to start reasserting your authority, and since you've allowed her to reign like a holy terror for the past two years don't be surprised when she objects, and quite strongly, to your trying to take back control.
You're going to have to show that you're not afraid of her, and you can't object to using strong arm tactics with her, at least at first. She needs quite a few Come to Jesus Meetings. I sincerely hope you're up to the challenge, otherwise you're going to get badly hurt.