His wife is negligent and is threatening my sisters who live near them with the fact that she can put him away anytime. Last time she did, she changed her number so dad couldn't reach her and then she had her neighbor set her up on an online dating site. She thought that was that. We thought she took him back home because my sisters convinced his wife that they would help. Come to find out she took him home because she couldn't afford it. My sisters cannot take dad and my husband and I are willing. Problem being, they are in Wisconsin and we are in Georgia.
If she will not relinquish POA or an alternate was not chosen, you can file for guardianship of your father. The courts will then choose a guardian for him- and they could choose his wife, so that plan isn't foolproof.
If your dad is still legally competent, which he may be even if diagnosed with dementia, HE can appoint a new POA. Can you take him to his lawyer to discuss that option?
If your dad is no longer legally competent, I think your best bet is to try to work with his wife. It sounds like she's not terribly interested in caring for him so if the money can be arranged to her satisfaction, she might give up her POA and allow the alternate to take over or allow someone else to be appointed guardian.
Guardianship is the only way you can override a POA.
But you are right that the POA can't appoint another person to be POA. Only the principal can do that.