"My brother turned away for less than a minute then the next minute he heard a gunshot," Pita Leausa told the Weekend Observer.
"The children were fighting over the gun when it happened."
James was shot in the face and died at the scene.
Ieti Leausa carried his nephew's body home, and was taken by police for questioning with the 8-year-old.
The Observer reported the boy could be charged with murder.
His mother, Pafuti Pita, burst into tears when asked how the family was coping. "He didn't mean to hurt anyone," she said.
The dead boy was the eldest of three children. Local television reported his mother was Samoan and his father a New Zealander.
Samoan resident Lili'a Va'alele told the Herald last night the story had made headlines across the country.
The uncle heard a bang, then saw the boy lying on the ground, she said.
"He said he thought he hadn't been hit ... but the boy was dead."