Nepotism (Vetternwirtschaft) is not a word that gets thrown much around in Germany. It popped up today because the news folks wanted to discuss Trump and some variation of the perception of Nepotism.
Why not real use of the word? Well....it's an odd thing. You can't point any German political figure that had their son, daughter, wife, or husband as some part of the political apparatus....even going back to the late 1940s. It simply doesn't happen within politics.
You might see some cases where German actors used their son or daughter in some movie, or a case where business ownership is bound to an entire family and everyone shares in the decision process. But in politics....it simply doesn't happen.
I think part of this issue is that Germans tend to have expectations that 'junior' needs to make it on his own.....without some inside deal with the city department, or some state agency.
So, when they do see any form of nepotism....in other countries....they tend to jump on it with criticism and judgement.