"Що зробив твій племінник вчора" should be an acceptable solution, because English sentence doesn't precise if the activity has or has not been finished.
Why is "Що вчора робив твій племінник?" wrong? Is there some specific word order in Ukrainian sentences we should follow?
No, you are right. It sounds even more natural
Sorry, I am confused here. My answer was' Що ваш племінкий робив вчора' and was marked incorrect. How then would you say 'What did you do with your nephew yesterday?'