"That boy is my grandson."
Translation:Tiu knabo estas mia nepo.
Praavo is great grandfather (from avo, grandfather).
Nepo doesn't build from other words because "avo" is already a base word (pranepo means great-grandson, though); unlike in English, this same divergence exists in other languages (in Portuguese, avô/avó vs. neto/neta).
Tio is (so far as I know) never used with people (vs things) , and it seems to be more general than "Tiu". Tiu is sometimes used with things, and seems to have a connotation of "that particular thing" rather than "that category of thing" (If someone corrects me, believe them; I'm not all that certain)
That's about as Ⓘ understand it. The -u ending means "this/that individual, this/that one," so it refers to individual people; and people are assumed to be individuals whether or not you know their exact identity. You also use it when you're talking about a particular object or creature.
In contrast, the -o ending is for objects, so tio means "that/this " or "that/this thing," and you use it when you're speaking of a single, generic interchangeable item. Evildea has a great youtube video on them here: https://duckduckgo.com/?q=evildea+tiu+tio&t=fpas&iax=1&ia=videos&iai=0vc-wNwS98o