At least you have your sister's support. I wouldn't worry too much about the rest of the family and Cathy A summed it up nicely about projected attitude from one's own experience.
I would suggest giving some specific examples of the trouble spots and see what advice follows. The nice thing about this board is you have a lot of parents with varying aged children and many have been through this stage already. I'm in the same boat in that my child just turned 4 so I can share what we are going through but as I haven't made it to the other side as of yet it might be bogus advice. My DD was never one for timeouts. She really could care less about them and being a child of such imagination she could sit in her spot and continue to play. We learned a long time ago to work with other methods such as a penalty system. She would respond better to the idea of something she loved doing being taken away.
