It is likely that this passage is supposed to be placed at the beginning of the story. This is due to the fact that the passage deals with the beginning of the family's lineage. Moreover, the passage describes how the two gods had children, and how these children became the sky and the earth. We can conclude that the author believes this to be the beginning of the world.
n the sentence, "in" is a prepositional phrase, but you have to add the words "place of" along. Otherwise it would not count as a prepositional phrase.
