nibling (n): collective reference to one's nieces and nephews
muggle (n): (adapted from the Harry Potter books) - person who can't acquire a particular skill easily, e.g., "I'm such a muggle, my nieces use all the functions of their cell phones and I still haven't figured mine out."

And some purely funny ones:
spice (n): plural of spouse
polarize: what a bear sees with
ostracize: what an ostrich sees with
relief: what happens to trees in spring