In a small town where there lived two brothers they were very lazy.哪里错了只改一处，最好附带原因，

译文：在一个小城市,在那里住着兄弟俩他们很懒。（没有错误）

In a small town lived two brothers who were very lazy.
此句为全部倒装句型，方位名词做状语置于句首采用全部倒装句式(谓语前置)，two brothers做主语，who引导定语从句。

把they改为who，引导定语丛句。相信我吧，楼上都是错的！

In a small town which there lived had two boys who were very lazy.

in a small town where there lived two brothers who were very laze.定语从句 如果使用原句的话在brothers后面要加句号.who were very lazy 是俩兄弟的修饰语

去掉there

去掉there，句子中which引导了一个定语从句，也就是引导In a small town，所以there在此多余。