I agreew with masterofnone.
Kids are not always nice to each other, but family relationships are long. Rather than getting caught up in outrage or suspicion, or frustration with your sister, I'd try to work with both kids together and be open about your desire to make things better. I would try using some techniques from How to Talk So Kids Will Listen and Listen So Kids Will Talk. I think doing things like asking your DD if she had videos of her cousin being mean is setting her up to view this situation in an adversarial way. I'm not saying you should let her be a doormat. You should encourage her to come to you if she is being mistreated--but you could also encourage the kids to work things out themselves, with your assistance, using the active problem-solving techniques in the book. Obviously, some family situations are too toxic to stay in, but this doesn't sound like it's at that level to me at this point.
