Dixieland Dancer has hit on a point that I think is very important.
The idea of allowing her to have her friends over to your home (her home) I think is excellent. It will reinforce that it "is her home" and you can keep an eye on who she is hanging out with.

Scared? Good grief, I would be too! You are taking on a huge responsibility.

But looking at this in a positive light - you have an opportunity to be such a good role model for her and her friends. Girls at this age are into clothes, makeup, music and BOYS! You might find yourself in the middle of a gab session with the girls or just your niece. It sounds as though she just might spill her guts out to you - so be prepared!

Just follow your heart and your instincts and you will be fine. Take it a day at a time.

Find out what her "passion" is - and if within reason perhaps it can be developed.

I wish you the best of luck!