The word G. fwîr “niece” appeared in the Gnomish Lexicon of the 1910s, a combination the feminine patronymic G. fwi- with the Gnomish feminine suffix G. -ir, so properly meaning “sister’s daughter” (GL/36). It is likely related to ᴱQ. súyon “nephew” (QL/87), and arose from something like ✱su̯īr > swīr > fwîr with the (Gnomish) sound change of sw > fw.
Neo-Sindarin: For purposes of Neo-Sindarin, I would adapt this word as ᴺS. whiel, with (a) the Sindarin sound change of ancient sw > hw and (b) the later suffix -iel “-daughter”. Since we have no other words for “niece”, I’d use it for female children of any sibling, not just a sister’s daughter.
A neologism coined by Paul Strack in 2022 specifically for Eldamo, the female equivalent of ᴺQ. súyon “nephew” based on the root √YE(L) “daughter” instead of √YON “son”.