All aspects could be worse, but the principle is worth enforcing, IMHO. I think the LW is right not to punish her daughter or make a big deal of her getting that tattoo. But the same point that everyone is using to excuse the aunt (and I agree with it) is why I think LW needs to have a talk with her and, at least for now, limit the time her sister spends with her daughter without her or the daughter's father present. It is true that at 19, the aunt probably does not have much more mature judgment than the niece. That makes it all the more important that she knows not to override the parents' wishes, with very, very few exceptions. The fact that there are exceptions (helping a minor obtain contraception; helping a queer minor avoid things like conversion therapy) make it all the more necessary to abide by parents' wishes in smaller matters, so that those exceptions remain about matters of serious principle and not about contradicting the parents.

I'm not going to lie: if one of her many adult friends/family overrode my and/or her father's decision about something, even (or maybe especially) something as minor as seeing a particular movie, I'd be pretty annoyed, and I would worry about what else they would disregard. She's our kid, and I obviously believe that we're best suited to make the decisions she's not ready to make yet. Of course, we have also (NGL) put the tattoo age at 18. I could see us making exceptions to that (a memorial for a deceased loved one would probably be one), but I wouldn't be best pleased if someone else made it.