Treating grandchildren fairly in terms of gift giving and showing kindness
Question

Am I regarded as being disobedient and rude to my parents if I tell them to be fair? Is it permissible to say that? Because they treat my sister’s children one way and they treat my children in a different way, and they are somewhat harsh to my children. They are also unfair in gift giving. If one of my small children misbehaves in the slightest way, they react as if they are adults and hit them, but with their other grandchildren, they are very lenient. Despite all that, I have never said a word to them, such as saying to them for example: “Why don’t you be fair?” What is the appropriate response to that, without doing anything contrary to Islamic teachings, as the matter has become extremely annoying and I rarely speak to them for this reason?
Praise be to Allah.Firstly
Fairness between grandchildren in terms of gift giving
It is obligatory to show fairness to grandchildren in terms of gift giving.
Al-Bahuti said in Kashshaf al-Qina‘ (4/309): It is obligatory for the father and the mother, and all other relatives, to be fair giving gifts to those relatives who would inherit from them, whether they are their offspring or others, such as a father and mother, or a brother and nephew, or a paternal uncle and cousin. That is because of the hadith of Jabir, who said: The wife of Bashir said to Bashir: Give my son a slave and ask the Messenger of Allah (blessings and peace of Allah be upon him) to bear witness for me. So he went to the Messenger of Allah (blessings and peace of Allah be upon him) and said: The daughter of So-and-so has asked me to give her son my slave. [The Prophet (blessings and peace of Allah be upon him)] said: “Does he have siblings?” He said: Yes. He said: “Have you given to all of them a similar gift to what you have given to him?” He said: No. He said: “That is not right, and I will only bear witness to that which is right and proper.” Narrated by Ahmad, Muslim and Abu Dawud. It was also narrated by Ahmad from the hadith of an-Nu‘man ibn Bashir, in which [the Prophet (blessings and peace of Allah be upon him)] said: “Do not ask me to bear witness to injustice, for your children have the right over you that you should treat them fairly.”
According to a version narrated by Muslim: “Fear Allah and treat your children fairly.” So my father took back that gift. Al-Bukhari narrated something similar. Thus the Prophet (blessings and peace of Allah be upon him) enjoined treating children fairly, and he described singling one of them out to the exclusion of the others as injustice, and injustice is haram. The fact that he instructed him be fair indicates that it is obligatory.
The same applies to giving gifts to all other relatives, because they are relatives. Excluded from that are wives and slaves; it is not required to treat them equally in terms of gift giving. Also it is not required to treat relatives fairly in terms of insignificant gifts, because they may be overlooked and will not have any impact. The fair treatment that is required when giving gifts to relatives is to give them according to their share of inheritance, taking the division ordained by Allah, may He be exalted, as an example to follow, and by  way of making an analogy between division during one’s lifetime to the division that occurs at the time of death. ‘Ata’ said: They never divided anything except in accordance with the Book of Allah, He be exalted. End quote.
An-Nawawi (may Allah have mercy on him) said: If the mother gives gifts to her children, she must be like the father in treating them fairly in all that we have mentioned. The same applies to the grandfather and grandmother. End quote from Rawdat at-Talibin (5/379).
Secondly:
Not treating grandchildren fairly
With regard to the way in which grandchildren are treated, the grandfather and grandmother must show kindness to their children and raise them with sound virtues, whilst also protecting them from bad manners and bad behaviour. They should not favour one of them over the others, because that creates rancour and envy among them.
You must try to be subtle in conveying this message to your parents, and you should not be blunt by calling on them to be fair; rather you should point out that the children will love their grandparents more and will honour them more when they receive gifts from them, and the like.
However, we may point out some factors that could have led to what you mention, such as if you are living with your parents, unlike your sister. This may lead to your parents showing more kindness to your sister’s children because they do not see them as often, so they regard them as being like guests, in contrast to those with whom they mix a great deal and may naturally often see them misbehaving.
What we advise you to do is to prompt your children to show more respect and care for your parents and to bear with patience anything they may do or say, and you should reward your children for doing that, and compensate them if they feel that their grandparents give precedence to their cousins in gift giving. And when doing that you should seek reward with Allah, for honouring parents and showing kindness to them is one of the greatest acts of worship and righteous deeds.
And Allah knows best.