This your father in law's father's property who died intestate. Upon this, th properties shall devolve equally on his legal heirs consisting your father in law and his brother.
1.can my father in law sell the property and share the amount equaly between brothers
Your father in law can sell only his share of property and not his brother's share, he cannot do so, i will be an illegal act.
2.what is the rights of my wife and her sister and their childrens in the property
During your father in law's life time, neither your wife nor her sister nor your mother in law has any right r share in the property.
3.my wife has 2 children and her sister has 1 children
It makes no difference, during the life time of your father in law he can dispose the share of his property in any manner and nobody can claim a right in it.