James Bond Jr./WMG

James is actually James Bond Sr's son
Come on! This is James Bond we're talking about. The "nephew" part is just a ridiculous lie probably to keep the boy safe (Not that it works very well)

James is the NEXT James Bond
A popular theory about the film franchise is that its use of The Other Darrin is in fact more of a The Nth Doctor; all those different looking Bonds are completely separate people, with the code name "James Bond" being passed down when one of them dies or retires. And here we have a kid using that name and training as a secret agent while still a teenager. Coincidence? He's actually being groomed as the next replacement Bond.