It's clear that the relationship between your family and your ILS is never going to work, however hard you try. For every problem you encounter with them, look at solutions which will suit you, DH and the DCS.
For example Christmas; don't invite them for Christmas day. If you think they will turn up anyway, look at doing something different or going somewhere else and maintain phone silence, definitely don't let them know of your plans. If they phone to invite you, say you have other plans. Employ the broken record technique 'Thank you for the invitation but we have made other plans'
The DC's birthdays, again give no information about parties or where you will be, and the same for holidays, if you don't want them joining you and spoiling it for everyone.
As I see it, if people make a nuisance of themselves at gatherings, upset everyone and spoil it, they don't get invited again, family or not. When you and DH stick to your plans together it will be much happier and relaxed for everyone. They are never going to change, but you and DH can change how you respond to them.
For the record, they should not have any responsibility for the DC, babysitting, picking up from school etc it's a risk that they will drip poison into their ears about you. They've already attempted to ruin DH'S life.