I would also not give in for the last year in the house. No way. Your children deserve a lovely drama free Christmas. Your eldest will shortly no longer believe in Santa (presuming you do the Santa thing) and for all that time has had to put up with bickering, drama and crying.
Is this really the dynamic you wish them to perpetuate into adulthood? Children usually live what they learn. I see it now with my dd’s 16 yo friends.
With one friend, her dad doesn’t talk to his family but dd’s friend does see her grandma (his mum). Dd’s friend’s mum is blaming her for the parent’s marriage breaking down and stopped talking to her a week ago and has blocked her dd on her phone (in case anyone forgot she’s 16), her father is overbearing but loving and is forcing her to work in the family business full time and the setting is inappropriate with lots of leery men. She doesn’t get along with her 14 yo brother at all and they snitch on each other to their parents… I’ve spoken to her about this all and asked her to stop btw. There are no rules and the rules are supposed to be known and seem arbitrary so dd’s friend doesn’t know which way is up. This is the next generation of a fragmented family.
Another 16 yo friend’s parents are divorcing and the parents are nesting on alternate weeks. The mum kicked her dd out at the start of her week, dad now has a girlfriend and stays with her, and as there is no room at the gf’s house unless she sleeps on the sofa, dd’s friend is staying with a friend. Imo the nesting agreement has failed and the dad isn’t sticking up for her either. Dd didn’t know either girl until in her teens so I don’t know the parents and can’t comment for what it was like as a child but my guess is chaos or at least one overbearing parent in both instances.
Idk why there is so much sibling rivalry going on in your dh’s family. But drama is no good and there must be a cause from childhood even if no one seems to understand why. I’d be keeping my kids away and inviting your mil to yours or going to your family. Drama is infectious and your dh may not be perpetuating the drama between the siblings. But he’s doing it in other ways and being incredibly controlling of the 3 of you. Control leads to chaos and he clearly has very poor boundaries.
Thus far you’ve been a pushover and he is just expecting you to roll over. I most certainly hope you will not. The more people give, the more people will take until eventually things are very uneven. As a result you wanting this Christmas with your family likely feels to him like you are upsetting traditions and dictating to him even when we can all see he’s completely taken the piss out of your good nature and desire to smooth things over.