Eagleflyer,
As an instructor, of course you are going to have to take control, however, it should be made very clear who is flying the aircraft, which of course should be briefed properly prior to flying.
Simply fiddling with the controls, retracting/extended flaps and always butting in, is simply unacceptable. There is a time and a place, usually at a point of low workload, maybe in the shape of a 'hot' debrief, or in the classroom when you are de-briefing the flight.
I wouldn't have any reservation these days about challenging any instructor after the flight about heir conduct in a constructive manner if I thought it was unacceptable.
Sadly, as has been mentioned, you will always get these sorts of individuals in private and professional flying, a lot of time, its people in the instructing role for the wrong reasons or they simply don't have the personal attributes or non technical skill for the job.
All the best.