Aunt Fanny is the aunt of Pepper Ann Pearson and Moose Pearson and a minor character in Pepper Ann. Her first and only major appearance is in "Thanksgiving Dad", but she appears in a flashback in "The Word" and, along with Uncle Harry, makes cameo appearances in various other episodes, usually in the distant background. She is voiced by Julia Duffy.
Fanny has a tense relationship with both Lydia and Janie, both of whom she seems to secretly delight in making problems for. At an earlier Thanksgiving celebration, she derived great enjoyment from their inability to get a full meal on the table. At this year's Thanksgiving, she calls Lydia just a few hours before arriving to let her know that the diet she's on does not allow her to eat poultry, forcing Lydia to rush a tofu turkey into the works!
By the end of the episode, though, the whole family has come closer together and Fanny actually compliments Lydia on her yams...which are actually butterscotch pudding (but word in the aisles is you can't tell the difference!).
However, exactly how she's related to Lydia and Janie is never made explicitly clear. While she is described as Pepper Ann and Moose's aunt, she is not Lydia and Janie's sister. Her husband is the perpetually-filming-everything Uncle Harry, who is not Lydia and Janie's brother. She certainly seems to know (and have a distaste for) Remo, Uncle JoJo's brother. However if she or Harry were from that side of the family, they would more likely be Ned's aunt and uncle, rather than Pepper Ann and Moose's.
Their children, the creepy twins Damian and Damiana are described as Pepper Ann and Moose's cousins, but it seems most likely that Fanny is a cousin of Lydia and Janie's, making Damian and Damiana the second-cousins-once-removed of Pepper Ann and Moose. Whew!