He has mental capacity and can comprehend stuff but sometimes they have him sedated. But when you ask him questions he looks and you and squeezes your hand yes or no but I am not sure if he has strength to pick up a pen and sign anything. Can his wife (my grandmother) sign anything on his behalf or can we ask the court and say he cannot take care of himself and cannot sign anything and grant someone power of attorney for him. - If we have proof from doctor.
Courts CANNOT grant power of attorney (you might seek guardianship but that's expensive, takes a while, and might not be usable to do what you wish).
No one else canm sign for him. If he can make an x or mark and understands what he is doing, that's enough. You still want a lawyer to draft the POA, and you want a written letter from his doctor saying he has capacity to do a POA. Have that AND the POA properly notarized and executed per your lawyer's instructions - do NOT use forms.