Hi, I'd like to help you with your question.
Is this a new behavior for your mother in law or has she always acted this way? If it is new, she may need to be medically checked out. Sometimes, as people age, they lose the ability to filter their thoughts and feelings. It can also be a sign of the beginning stages of dementia or Altzheimers. She needs a thorough check up and her doctor should be informed if this is a new behavior.
If your mother in law is cleared medically, then this definitely sounds like a problem your husband should be dealing with. It is his mother who is favoring one of his children, and hurting the others. He needs to put his family first and deal with her. Have you talked with him about why he is hesitating in talking with his mother about this? If you can, try to approach him again and let him know you are concerned about your children and the effect this will have on all of them, even the favored child.
If he still refuses to talk with her, you may have to do it. Let your mother in law know that you have noticed how she favors one of the children. Then tell her you feel it hurts all of them when she does this and you would like her to treat the children equally. Try to give her the benefit of the doubt when you approach her. If she acts hostile or refuses to address the problem, however, you may have to put limits on her visits. You can decide what is comfortable for you, whether it is shorter visits or visits without the kids, etc. You can also send back the gift she gives to the one child and let her know that unless she gives all the kids gifts, then she can not send any. Do this in a polite and gentle way, but make it clear you will not allow her to treat the kids differently.
Also, consider talking with your children about the situation. You said you already have told them they are loved equally and that is great. Let them know that something is going on with grandma and you are not sure what, but you are working on it. Tell them to be open about how they feel about what grandma is doing and to talk with you as much as they need to. If your mother in law does this again in front of the kids, you may need to remove them or address the issue right there by saying all the kids are "precious" and then steer the conversation to another topic.
I hope this has helped you,Kate