<p>If she gets in and you don’t, she won’t be taking “your” spot. She would’ve gotten in if you hadn’t applied, and you wouldn’t if she hadn’t. At this point, this is not your business, so if she keeps bringing it up, practice being noncommittal: “I’m applying to Harvard ED!” “Oh, ok…are you sure they have ED?” “I’m positive!” “Oh, ok then.” And you certainly shouldn’t bring it up. You’re not going to convince her, and you should stop trying: only a decision letter will let her know for sure, it sounds like. And no gloating if she gets rejected.</p>
<p>On ethical questions, I lean more toward the interventionist than the norm, I think, so I’d mention to the relevant parent (the one whose biological niece she is) that she’s planning on lying on her applications, and that concerns you. Then you back the heck away. My impression is that the average person would tell you just to keep quiet because it isn’t your business (which it isn’t, especially once you two stop talking about it), so that’s definitely an acceptable option, too.</p>