help in law issue...

Heads up this is going to be a little bit of a rant. And sorry if it's in the wrong group. 
So my husband, two kids, and I live with my in laws. We have currently been living with them for a little more than two months now, and while I'm greatful that they are letting us, I'm getting super stressed and a little pissed. First of all there are 12 people living here and four of the are five or younger. And I know all the younger kids are over stimulated with how many people are here and how much is going on. But that is still no excuse for the two younger ones, that aren't mine to hit or yell at my two when they have something one of them wants or have done something out of their control (i.e. Burp, fart, cough, sneeze). I must also mention I'm teaching my kids to ask for something they want whether someone else has it or not, and to not hit or yell, which I know is hard for a three and almost two year old to not do. But here's the part that really stresses me out and makes me mad/pissed. Their mom, my kids grandma, as far as I know doesn't tell them not to hit, at least not to hit my kids. Yet when my kids do it they say that's not okay. And I've been asking them, when I catch them hurting my child, not to hit/hurt them and ask nicely for whatever it is they want. My kids will usually hand it over if asked nicely to do so. But  since I'm overly stressed and my hormones are sorta out of whack do to that time of the month. When I've been asking/telling them not too do that to my kid I raise my voice a little and use a stern tone. Well at one point today I did that after one of them did that to my kid and my mother in law happened to be standing there. Her response made me fell guilty but at the same time pissed. It was along the lines of...
She's three, she's going to hit, and your kids hit me every day and I don't yell at them like that.'
I wanted to respond with "so tell them not to hit and to use their words, even raise your voice at them if you need too, you are  are their grandma." But I didn't cause I hate confrontation, being the center of attention in any form, and being 'yelled' at or lectured.
I need advice on what to do...
Let me put on record that I actually really like my mother in law and we usually get along. But we still have our differences and issues like anyone.