I have an Iphone 4 that no one is using and I want to give it to my sister but when I turn it on it states: Activation Error. This device is not registered as part of the iPhone Developer program. What is that? and how do I fix it?

Can it be that the Activation Lock is active? Without removing it, the phone can't be used with another AppleID.

Find My iPhone Activation Lock: Removing a device from a previous owner’s account

iCloud: Activation Lock

Did anyone install the iOS beta on this device? Best thing we can recommand is restoring the unit via iTunes; after that developer forums.

That means you have a beta version of iOS installed on it and the phone is not registered to your developer account. Post in the developers forum for help.