Hello, I am Rafael. Thanks for asking your question - I'm here to support you. (Information posted here is not private or confidential but public).
I am very sorry to know about this overwhelming and frustrating situation.
This is very serious since we are talking about a three year old child who is presenting unacceptable behavior and who does literally seem to have the power to do all these things affecting himself, his sister and all the adults involved. Children do totally depend on those adults raising them, starting with parents and grandparents or any other adult playing a close parental role.
Children from infancy need to learn mainly from consistent modeling about respect, responsibility, sensitivity about other people's feelings, what is acceptable and what is not. Parents and care takes need to teach these skills, values, understanding and sensitivity through words to attitudes, reactions, feelings and emotions, healthy affection and discipline. Every behavior we as parents and adults present, literally shape our children, and these includes the fears, virtues, defenses and habits they develop.
Children are very smart, and they use their intellectual intelligence to manipulate and control adults in order to fulfill their ego as much as they can, because they are naturally selfish, this is normal behavior, but it does need to be shaped, oriented, guided, supported, and if we as adults do it in mature, healthy and wise ways, we would get good results most times. Problems arise because we are all human beings, so imperfect, with personal and relationships issues, multiple challenges and stressors at several levels, and our concrete reality with all these issues and colors is reflected in how well we treat and raise them. This is why to make a good job with them we need to work on ourselves first, to resolve our own issues, personal, marital and family problems, since only in that way we would be able to effectively take good care of them, cope with the challenges raising them presents, and grow with them too.
Children who show anger and aggressiveness, violent behaviors and disrespect, most times act out through such behaviors painful emotions and feelings they do not know how to cope with, and if they got concrete modeling-programming from their own parent or any other adult close to him about how to misuse anger, to express it dysfunctionally, or learned that they could manipulate them by doing things in certain ways, they would do their best to make things work for them, because they are intelligent, have the instinct to push and do your best to please themselves and make others please them.
These is why parents we need to literally teach them by modeling behaviors how to be respectful, responsible, have self-control and not to be selfish, but to love and take good care of ourselves in healthy ways.
A child wets his bed most times because of undergoing intense fear and pain because of mistreatment, neglect or any other form of obvious or subtle abuse. It is very common to see how children whose parents have marital problems for example would present "enuresis" or bedwetting, and how they rehabilitate from this behavior-disorder as soon as their parents resolve their problems, or the parenting is improved, or the family harmony gets reestablished.
I suggest this child's parents and grandparents to get professional support around healthy parenting, which could be through parenting classes or counseling, to work on personal, marital or family issues with counseling support and learn how to implement healthy discipline and affection, setting and enforcing clear rules and boundaries with full consistency. For example, taking dinner away is not a healthy approach to educate, raise or change a child's behaviors, since dinner is about a core need every child needs to live and be healthy, but many other things-behaviors-activities, from TV, unhealthy games, ice cream or junk food, or any other activity that does not directly affects the health and integrity, grow or development of a child. Children are very smart, they do not self-sabotage, when they see things do not work for them, when they know they are not being spoiled but must be respectful and responsible in order to get anything extra, they change their behavior.
Healthy affection and support, empathy and compassion should always be unconditional, but not any form of codependent tolerance or enabling. Please read about codependency and look for a support group for codependency as previously suggested. Model all the behaviors you want him to learn, to develop, without tolerating any abusive behaviors, not through violence but through restriction and limitation of any undeserved extra benefit.
Does it make sense?