Answer
Hang in there with your nephew. He had trouble adjusting to your sister's authority too. Sit him down and tell him what you said in your last paragraph "I truly care for this child and want him to grow into a beautiful person." This will take patience. He is going through a lot, developmentally speaking, at age five. Because of the severely neglectful and possibly violent environment of his earliest years, attachment is hard for him. It sounds like he has made some progress in that, but you are correct to want to maintain structure in his daily life and boundaries on his behavior. So, it's a balance of being firm about unacceptable words and actions, and reassuring him that he is safe in your care and affection.
Here are a few ideas to try. You can also read a more in-depth strategy for caring for a child who has been traumatized.
- Set some rules. No hitting, pulling hair, saying mean things, etc.
- Stay calm. Try not to take it personally. Instead, take it as an opportunity to teach him the right way to behave.
- Set a weekly goal for him. Decide what behavior you want him to learn. Teach him how to do it; and tell him that for practice, he will earn a token (or sticker, or whatever) every time he does it that week. If he messes up, just stop and say, "Let's try that again. Now, what do you do instead of (pull my hair or say something that hurts my feelings)? If he needs a reminder, give it along with an opportunity to practice the appropriate behavior. Count up his tokens and give a weekly reward based on how well he did.
- Watch for stress triggers for bad behavior. Don't overlook things like hunger, fatigue, tension; and deal with those issues to defuse his mood.
- Since you have so much time together, perhaps his parents might look into a therapeutic play session or something similar for him to attend during the day. I don't know the situation, but it's something to consider.

