What is happening now may also be a kind of triumph for them: Mother, you decided over me, when I was a child, but now it is we who decide!
You need not be worried about potty-training. She will learn, whether she is trained or not. To sleep in her parents' bed need not be a problem. It can give her security, especially since she is in day care during the days.
Children can be influenced by the people around them, even if they do not meet so often. Try to get your son's family to accept and like you.
Children who are brought up with order and discipline will more often become conscientious and well-adapted adults.
Children brought up with a great deal of freedom will more often become creative adults. Society needs both kinds of people. Some children, who are brought up in chaotic circumstances, will still do well later in life. Often a reason for this is that a grandparent or a neighbour has influenced them.
I know of people who have been brought up in the way you describe, and who have chosen to live an orderly life. Not because they have been trained that way, but because they decide themselves that this is what they want.