It sounds like your nephew was diagnosed with stable slipped capital femoral epiphysis, or SCFE. This type of hip dislocation does happen most often in boys and particularly in boys who are overweight.
The symptoms of this type of dislocation usually begins with stiffness in the hip which may or may not go away for a while. This may be followed later by pain in the groin as the bones start to rub together. The affected leg may turn outward while the child walks and he may have trouble turning it inwards.
Ninety percent of children with this type of dislocation have what is called the stable type. The other 10 percent who have unstable slipped capital femoral epiphysis usually have severe pain and are unable to walk.