Property dispute

You mentioned the property being ancester property the right of sister in ancester property is still there ,but the legacy is not corect as the claimant is step daughter of your aunt and her right to ancesters property may not be vaible.If your aunt calims share and then gifts or other transfer to her step daughter then that is applicable

Her father himself did not have any rights in his wife's property. 

In fact your father in law sister herself is not having any rights in the property. 

Hence the stepdaughter is not having any rights over the property. 

Her claim is legally not maintainable