Siblings are always fighting. When should parents step in?

Small quarrels are normal and a chance to learn to make peace; step in at once when there is violence, insults or persistent bullying.
Allah commands that believers who fall out be reconciled justly, for the believers are brothers (al-Hujurat 49:9–10). The story of Yusuf shows that sibling envy can escalate if left alone, but also that it can end in forgiveness (Yusuf 12:92). In practice: do not rush to punish one child without hearing both; teach them to express feelings in words; set house rules such as "no hitting, no teasing"; and praise them when they share. Reduce the triggers, such as favouritism, too few toys to go round, or tiredness. Give each child one-to-one time with a parent. See Educating the family.