What is the meaning of the term nepotism?

Nepotism means practice of appointing relatives and friends in one's organization to positions for which outsiders might be better qualified. This is against assuring equal opportunities for work or for having a job irrelevant to gender, color, race, religion, and/or closeness to the employer. However, in private business sector, despite its negative connotations, nepotism (if applied sensibly) is an important and positive practice in the start-up and formative years of a firm where complete trust and willingness to work hard (for little or no immediate reward) are critical for its survival.