what can make the front differential lock up on a 96 jeep grand cherokee all wheel drive?

Define "lock up". Can you jack up the front wheels and spin them by hand (with the vehicle in 2WD)? Try both sides. If the both spin independently, try them both at the same time.

No, the transmission shop said it's because I put 20 inch rims on the truck.

And putting huge wheels on your truck really requires upgrading the brakes.

I did that but the differential was leaking oil and I could smell it so I had it towed and the front end locked up. I see a lot of cars with after markt wheels and I really don't see them being the problem. It is a 96 after all.

Oh ok. Well the LEAK is what ruined the diff, not the wheels. But 20s arent helping. Ask any technician. Cars with big heavy wheels eat up brakes fast. Not to meantion your speedometer is off and your lose some fuel economy. It has to do with unsprung weight and rotational mass. Im not a fan of huge wheels. Im not saying they suck, just that most people arent aware of what they do to a vehicle.

I kind of thought that as well but, it's mainly for the look and even with AWD I've never heard of it causing this to lock up.

Well if your differential runs dry its going to blow up regardless of wheel size.

Why did the oil start to leak?

Theres several seals on a front axle. Wheel seals, pinion seal, differential cover gasket. Any one can leak over time. When the front axle (which includes the diff) runs dry, bad things happen. Usually the gears that allow the front wheels to turn while rotating go first. The teeth melt/break and can jam inside the assembly. But thats just one of many possible outcomes.

With any gasket or seal, its more of a question of when it will leak. Eventually every one will fail. Theyre only rubber.

I'm having it rebuilt now, so do you think I'll be fine now.

Just make sure ALL the seals are replaced.

Como se des lakea la 4x4 del gran cheroke laredo 1996