It is garden variety nepotism. If it was the CTO's wife's nephew, the CTO's allies wouldn't have argued for a "woker" candidate instead, they'd have pushed very hard on some other basis like the "intellectual diversity" of his different experience or his solid-but-irrelevant academic track record or his supposed credentials as a self-taught programmer or his "leadership potential" or his "strong recommendation from a colleague".
The difference is that if the under qualified relative was justified for one of those reasons people would be less likely to insist the solution to this very obvious nepotism was not to broaden the hiring pool beyond the CTO's relatives, but to chuck all the company's initiatives aimed at attracting career changers, academic-high achievers, autodidacts, leaders or referrals in the bin...
If it was his nephew, then he'd put down nonbinary or some LGBTQ2S flavor.
It's not garden variety nepotism because the executives CAN and DO use HR to attack critics of his relatives or allies.
The difference is that if the under qualified relative was justified for one of those reasons people would be less likely to insist the solution to this very obvious nepotism was not to broaden the hiring pool beyond the CTO's relatives, but to chuck all the company's initiatives aimed at attracting career changers, academic-high achievers, autodidacts, leaders or referrals in the bin...