Census notations such as inlaws, grand children, stepchildren,etc. etc., are always referred to the head of household, in this case Geo. Patch was the Grandfather.
One of his daughters married a Chauncey.
If Elizabeth was the remarried "Chauncey", the children would have been noted as step grand daughter(s).
Censuses are not totally without error however, and I have seen where a woman was remarried, bringing in her children/grandchildren to the marriage and they were enumerated as sons or daughters, grand sons/grand daughters, etc..
What may have happened here is, both the man and wife (Chauncey) were disabled or deceased..and the Patch family were raising the grandchildren. There are obviously other possibilities.