Re-read the description you gave about your children. (Happy, funny, etc...)
Does that sound like the description of children who have a lousy Mother?
Have you ever noticed that when someone attacks you, they will hit you where they know it will hurt you the most?
For someone who is so worried about the demonism of Halloween, your sister should look for the source of demonism within her that would have her say such a horrible thing to her own sister.
That must be more of that exclusive Jehovah's Witness "love" we hear so much about. She's to be pitied.
Keep being a wonderful Mother and don't let this get you down. When someone can't manipulate you with guilt, they often times will try to cut you off at the knees in some other way. Recognize it for what it is, and let it roll off. You don't need her validation about your parenting abilities. You can see it in the way your children behave!