I have not read the previous answers. My immediate reaction is that your children need grandparents, not competitors.
I hope you can let both your parents know that YOUR goal is for your children to love and appreciate all of their grandparents (and step-grandparents), and that you want neither to teach them nor to have them taught to have favorites. If your parents want to be opponents, they should do it on the golf course, not in your family.
You'll have to plan what to do if, by chance, either or both of your parents don't agree with this. They may not have thought before about where you're coming from. A counselor may be able to help you with this.
If your parents are friendly to each other, perhaps they could come up with a way to cooperate in impressing their grandchildren instead of competing. How can one set encourage their grans to appreciate the others?
As for your far-thinking four-year-old, it's a little like anticipating Christmas, isn't it? How are you teaching your children at Christmas to love the givers and not just the gifts?
I've had friends who told their children up front that some of their relatives go overboard - and although it may be nice for them, it isn't the way to measure love. You'll have to model that for your kids. Keep helping them pay attention to (and look for) the wonderful things in each grandparent's heart, not just what he/she gives them. For one reason or another, the fancy gifts could stop next week, but the love can still go on and on. That is what your children want to learn to look for and love. (And that is what your parents really want them to know, I'm sure.)