It seems that a manuscript of Jane Austen's play "Sir Charles Grandison" was in fact discovered fairly recently. I have not read it, but I cannot believe that Ivory-Merchant-Jhabvala could really have understood it. Austen's young writings are brilliantly comic, but if there is anything funny in `Jane Austen in Manhattan' I missed it.
The film could have been a good satirical comedy. Maybe parts of it are funny to the Manhattan in crowd of the off-off-Broadway theatre, but you will have to know the participants in that activity a lot better than I do to enjoy this movie.
The central figure seems to be that played by Sean Young. James Ivory does not bring out any aspect of competence or charm this young woman may have, thus making the contest for her participation in the two competing efforts to produce a play pointless.