1. "by inches" usually means 'bit by bit'. Not enough context to be certain.
2. Does "the way they have taken" here mean "the way it happened to them"? You may be right, but there are way too many pronouns to be sure. Knowing enough US history, I'm guessing that the Indians are the ones being murdered, so "the way they have taken" means the method the US government used to murder the indians.
3. You are correct.
Student or Learner