I'm thinking of telling my sister that she's not doing a good job.
Why would you tell your sister such a thing?
I'm going to have a talk with her and evaluate her as a mother, hopefully she can change her ways.
I hear you, but it is very wrong to interfere in how a person raises their child. You can try advising her or voicing a concern, but don't jump in and dictate someone's parenting. They will resent you for it forever.
I can't let her make a mistake while raising my nephew.
I completely understand and it's great that you're looking out for your nephew but again, it's not your place to interfere. The exception would be if she's doing something that puts your nephew at risk of being hurt. If he isn't then you can just offer advice and such but don't just tell her what she should be doing.