My step-mother is trying to make my dad's health condition seem worse than it is to get Power of Attorney over him. What can I do about this?

What is "automotist" (you have it as a diagnosis above)?

Let's slow down for a moment before we start calling the authorities.
How sure are you of your stepmom's motives? What does she have to gain by becoming his agent? By your own admission he is experienceing cognitive loss which means that someone must act on his behalf. Apparently, your father gave that responsibility to your stepmother.
Is your father in danger? Is your stepmother having an affair with a 20 year old? What are you worried about?

If your father gave your stepmother this responsibility I would respectfully suggest that you butt out unless there is something seriously wrong. Spend your energy on building positive ties to your stepmom so you can be there for your father.

The bottom line is that unless he is in danger and not being cared for "social services" has better things to do. The only other recourse you will have is legal and you will spend a lot of money and probably lose. Believe it or not...maritial contract is thicker than blood.

Is your dad of sound mind enough to give someone POA? Why hasn't he already given it to you instead of to his wife?

What exactly is the condition of his health?

What is you step-mother doing to make him worse?

It sounds like you might have a case of elder abuse concerning your mother and you might want to contact social services about it.

as usuall a good answer I call Crowemagnum the voice of reason

How long have they been married and how often do you see him? Do you live there with them? How is she making it seem worse than you think it is and could you be in denial about his condition. Most importantly, what does He say about it?

It sounds like you have issues with her that need to be addressed for your fathers sake as well as your own. Good luck to you all ...