The MIL was way out of line taking this step without your daughter's involvement. Your daughter can consider reassembling the cribs - don't know why she is stuck with it the way it is. HOwever, the kids are in extreme danger if they are climbing on bureaus - particularly if they can open the drawers and use them as steps to work their way to the top. The bureau can tip over easily and many children have been hospitalized or even killed because of this. Your daughter must immediately purchase braces made for this purpose, and bolt the bureaus and bookshelves, anything else, to the walls.
Two year olds don't always do as they are told. Neither do three year olds or 7 year olds or 18 year olds. They have to be safe while they explore and do what kids do.
If your daughter has employed the "modeling" technique to show behavior, she might want to stop the "swat on the butt" method of discipline because the kids will "model" that. Once they think it's acceptable to hit under any circumstances, they will start whacking each other, other kids, and their parents.
Her husband needs to sit hit mother down and tell her to stop parenting those kids instead of him and your daughter. This situation is not going to get better if his mother is empowered to step in just because they live in her house. Otherwise, put the baby monitor in HER bedroom and let her get up when they awaken.
The other posters have listed some great books and techniques. Whatever your daughter decides, it needs to be something she can do consistently.
Good luck.