Unjustified favouritism towards one's family and friends.
Interestingly, this word comes from the Latin word for a grandson - nepos - from which the English word nephew is also derived. Those researching their family history should bear in mind that nephew, when used in older documents, often means grandson. When references are made to the grandsons of popes, however, it is usually a euphemism, for sons from improper relationships.
And he didn't seem to be afraid of any of the recognized forms of military danger, such as Spaniards, cannon-balls, canned beef, gunpowder, or nepotism.
O. Henry, The Moment of Victory in Selected Stories. Amazon
Also he peeled off that last scandal-rag of nepotism.