Something tells me that your sister has that effect on more people other than your daughter. But i understand why this relationship would unsettle you more.
People respond better to moving targets, than they do to static ones. Meaning you may be the responsible one, looking out for your daughters best interest, but since your sister carries all the bells and whistles, your daughter may be more inclined to her.
You should discuss this with your sister if you feel that she incites that behavior on your daughter or you should consider spending some time alone with her, out on a road trip or a hike to strengthen your relationship.
Your sister's daughter and your daughter are first cousins to each other. Your sister's daughter's daughter (her granddaughter) is first cousin once removed to you daughter. Your granddaughter and your sister's granddaughter are second cousins to each other.
Your sister is your son's aunt. Your sister's daughter is your sons first cousin. Your sister's daughter's son (your sister's grandson) is your son's first cousin, once removed.
You mother's sister is your aunt. Your aunt's daughter is your first cousin. Your first cousin's daughter is your first cousin, once removed. So your mother's sister's daughter's daughter is your first cousins, once removed.
Your child and your sister's daughter are first cousins. Your grand child and your sister's daughter are first cousins, once removed.
Your sister is your son's aunt. Your sister's daughter is your sons first cousin. Your sister's daughter's son (your sister's grandson) is your son's first cousin, once removed.
The daughter of your mother's sister is your first cousin.
Your sister's daughter and your son are first cousins to each other. Your sister's daughter and your son's daughter are first cousins, once removed to each other. Your son's daughter and your sister's granddaughter are second cousins to each other.
She is the man's sister or his first cousin.
Your daughter and your sister's son are first cousins to each other. Your sister's son's daughter (her granddaughter) and your daughter are first cousins, once removed.
Your child and your sister's daughter are first cousins. Your grand child and your sister's daughter are first cousins, once removed.
Your daughter and your sister's child are first cousins. Your daughter and your sister's grandchild are first cousins, once removed.
Your daughter's aunt is your sister, or your spouse's sister Your sister's husband is your daughter's uncle Their daughter is your daughter's first cousin (and your niece) Her sister is also your daughter's first cousin (and your niece) So, the answer is: her first cousin, and your niece.