Tell them to lay off . If your children are not behaving badly they have no right nor reason to be mean no matter whose sisters they are.

Assuming my kids were old enough (~5 yrs and up), I would tell them to stick up for themselves, without being rude. I'd advise them to tell their aunt that she shouldn't behave towards them that way. I'd also encourage them to do it when I was around so I could back them up. Of course, if your sister-in-law is doing things like deliberately not inviting them to parties, then that's something you need to discuss with her -- I wouldn't encourage my children to get involved in that. However, if she's being verbally abusive then that's something your children can help resolve. Next, I would have a chat with her myself. I would do this after my children had spoken to her. If there was a reason the kids hadn't spoken to her first, I'd talk to her anyway. It's important for children to learn they can resolve their own issues without somebody else having to step in all the time. It's equally important for children to understand that being a child does *not* mean they have to put up with crap from anybody. But they are still children, so they need your help, support and guidance to do it. In later life they'll come up against these sorts of problems with class mates, co-workers, family members etc -- and the sooner they learn how to be assertive, resolve conflict, establish their boundaries, and do it as gracefully as possible, the better.

The word is BOUNDARIES. You set them up. Stand up for your kids, and for other people your sisters in law are being rotten to. Say: please do not treat my children like that. It is not nice. If you continue to do so, I will have to limit the amount of time you spend with my family. I had to do this with my mother at one stage. She didn't like it, but she pulled her head in.