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Nephew was an Ood who lived with Auntie and Uncle on an asteroid - actually an accretion to a sentient lifeform called House.
Nephew - like Auntie, Uncle and Idris - was brought to House through a rift in space-time. When he arrived, he was broken, but House fixed him. There he lived with Auntie, Uncle and Idris. He tended to Auntie's and Uncle's worries in the manner of an enslaved Ood. However, unlike Auntie and Uncle, he did not possess any obvious signs of being "repaired" by House. The Eleventh Doctor attempted to fix his translation sphere, but it didn't work very long and only picked up Time Lord hypercube transmissions, not the Ood's thoughts.
Nephew also had the ability to drain people's minds and souls. This may have been a natural ability of Oodkind or something House gave him.
Soon after the Doctor, Amy, and Rory arrived on the asteroid, Nephew was possessed by House. He chased Amy and Rory through the TARDIS corridors. He met his demise in the control room used by the Ninth and Tenth Doctors when the Doctor and Idris' makeshift TARDIS materialised in the space he was standing in, rending him apart at an atomic level. (TV: The Doctor's Wife)