Chua Wan Zuen, aged two, died after being pinned down under a blanket in August last year with eight people, including her parents, crushing her for several hours in an attempt to drive away evil spirits.
A high court in northern Penang state ordered the parents -- an engineer and a traditional herbalist -- and an uncle to be jailed for one year, quashing an earlier fine of 10,000 ringgit (USD 3,000) each, meted out by a lower court in August, their lawyer Ang Chun Pun said.
Ang said the aunt, 41, persuaded the rest of the ethnic Chinese family to try the "prayer session".
"They were staunch Buddhists. They believed that the child was possessed. They intended to help the child," Ang said. "But the prayer session in an enclosed space went far too long. The cause of death was suffocation."
Government lawyers withdrew their appeal to increase the punishment for the girl's grandmother, who was also fined 10,000 ringgit, because she was sick.
The seven originally pleaded not guilty to the charge of negligently causing death, but in the course of the trial admitted to committing the offence at their home in the northern town of Bukit Mertajam.
The maximum jail term is two years.
An Indonesian maid, who police said had joined the seven others in the ritual, was not charged and testified against the family.
Malaysia is a predominantly Muslim country, but has large non-Muslim ethnic Chinese and Indian minorities.
In 2008, a Malaysian Muslim couple were beaten to death by family members in a bizarre ritual to cure them of a smoking habit and illnesses.
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