K.C.
We have a couple of favorite game that can include everyone. I make a list of Christmas songs and carols - they can be secular or religious, but a mixture is funner. Then either play pictionary or charades. Draw out a title, then either act it out or draw it. We sometimes divide into teams, but not always, it can be funner to just all participate.
Another idea, similar, is to give everyone a paper with topics on it: song, person, object, animal, etc and have them fill in the answers. Put all the papers in a bowl, and when a person draws it out they can choose which thing on the paper to act out. This take very little prep time, and doesn't cost much, either. Half the fun is to watch the faces of the kids when Grandpa starts acting things out!