Unrelated means the children in the group are not all related to each other even if some of them are siblings not all of them are. Unless you have legal custody of your nephews then they must count in your 5 daycare children. This applies to grandchildren too.

In theory what it means is if a family like Kate plus 8 wanted to put her kids in care you might legally be allowed to care for all 8 of them since they are related to each other but not even sure about that one.