"My aunt has several daughters."
Translation:Min moster har flera döttrar.
Probably either would work. "Moster" is a short form of "mors syster" (mother's sister). "Faster" is "fars syster" (father's sister). The same applies to grandparents....you have a mormor, farmor, farfar, and morfar. Similar with aunts, uncles, nieces, and nephews....the word specifies the exact relationship.
I’d say it’s common with your grandparents, but not so much with your aunts and uncles, it sounds a bit old fashioned. If you’re talking to your friend who doesn’t know your relatives, you’d likely say both min mormor and min moster, if you’re talking to your mother, you’d likely say just mormor but then say the first name of your aunt. You would also address your aunt by first name, but you can say mormor to your grandmother.