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It might mean they have an incestuous relationship. It might merely mean that the uncle is trying to share a private joke with the nephew.
A niece or nephew is the child of an aunt's or uncle's brother or sister. So the parents of the aunt/uncle and of the niece's/nephew's parents are the same people - their grandparents. The grandmother of the aunt or uncle is the great grandparent of the niece or nephew.
To your uncle, you are his niece or nephew.
Ray Misterio is the name of both a uncle and nephew who are famous and share the same name. The uncle is a Mexican professional wrestler, actor and trainer. The nephew is well known in the for WWE.
Your uncle's nephew could be you (if you are a boy), or your brother, or your first cousin. Your uncle's nephew could also be unrelated to you if he is the son of a sibling of your uncle's wife.
You are your nephew's uncle, or aunt, and his son's great uncle, or great aunt. Your nephew's son is your great nephew.
You would be a neice or nephew, neice if a girl and nephew if a guy.
You are a great great Aunt (or Uncle) to the grandson of your Nephew.
Your brother's (or your sister's) son is your nephew and you are his aunt if you are a female or his uncle if you are a male.
An uncle's nephew and the uncle's child are first cousins to each other. The uncle's great granddaughter and the nephew are first cousins twice removed to each other.
You are the grand uncle to any children your nephew or niece have.They would be your grand nephew or grand niece.If the children of your nephew/niece have children of their own, you'd be a great uncle too.
A great uncle is the brother of the great nephew's grandfather or grandmother.