Definitely coordinate with the parents, not only to find what your nephew's interests are but also so no gifts are duplicated.
If they don't have advice or you can't ask for some reason, Brio scale trains, construction equipment, emergency vehicles, dinosaurs and generic toys are usually a good bet, they don't usually understand or care about brand names or franchises yet.
if they don't have some already, 100% on the Brio train set - except not Brio. The generic wooden railway sets are just as good nowadays, and many many times cheaper.
You can buy a whole dinosaur themed wooden railway set on Amazon for £37. I'd want that, even as an adult!
FWIW, both of my kids played with their wooden railway for years - seriously good investment.
Board books. Toddlers are murder on books with paper pages. Stick with classics like Goodnight Moon or Dr. Seuss, or if you want something more recent the Little Owl series by Divya Srinivasan, or Calm-Down Time by Elizabeth Verdick are really good.
Playground/beach toys, like a bucket / shovel / rake set that parents can keep in the car. They'll likely get lost, so go for cheap and sturdy over premium and expensive.
Sidewalk chalk, like the huge fat ones.
The water based coloring books someone else mentioned are great, too. No cleanup (beyond the occasional water spill), they can be reused, and they're great entertainment for the car.
And yeah, like others have said, coordinate with the parents.
And if you hate the parents, get a Furby knockoff or something else that makes noise.
They are black and white illustrations that have the ink in the black parts. The kid takes a brush with some water and scribbles to create color. It's just perfect for that age, and it's not more junk that the parents need to collect.
Source: have toddler under two and friends with babies that just turned 2.
A toy that makes a lot of sound- like a truck with siren noises or a little electric piano, or spaceship with explosion sounds. There are these great plastic dinos that roar when you play with them. As a parent, I’m telling you, their parents will thank you.
Every kid is different, but if you're not able to ask the parents then a safe bet is a duplo set. Bristle blocks are also great. My kid is currently 2 1/2 so these are what I know would be hits with him and his friends.
You could also get one of the following books:
Goodnight Goodnight Construction Site
Don't Worry Little Crab
The Little Blue Truck (it's a whole series, the Halloween one would be appropriate)
Bear Snores On or any other book in that series.
Iirc, we introduced a strider-style bike around that age. Even ride-on toys can fill that role as we in the northern hemisphere move into the colder months.
It's kept my daughter interested and her several years brother loves to play with it too. It's got a few cute songs that she dances to. There's one about mixing milk and spaghetti and some nonsense. So it's funny for the parent. It was well worth the money. As a kid, I remember playing with the little people house up until like 10 or something so it doesn't get old.