Translation:Does your nephew live on Molokaʻi?
Uh..."noho" literally means "sit", right? This is the first time I've seen it used to mean "live at".
Ma ka ʻōlelo hawaiʻi, to inhabit a location is to noho that location. In English it is more natural to say that someone "lives" there. In Hawaiian, if you used the same terminology, it would imply that the location is literally giving you / sustaining your life.
As with the majority of huaʻōlelo hawaiʻi, there are many different meanings for Noho. Noho can literally translate to: to sit, to stay, to occupy, to inhabit, to reign over, to establish, to convey authority over, to be possessed by a spirit, etc.
Hope this helps!