Are Fang & Vanille sisters?

[Ezme]

ummm I've seen whole families live in smaller... hell my house probs isn't much bigger, although it's just me and mum here.

[Tseng]

There is one adjacent to their home that is inaccessible. Remember the sandlot infested with fiends? It's perpendicular to the larger home whose base resembles scaffolding somewhat.

[Tseng]

Im going to reference my own word here... but anyone remember that movie Sandlot? You're killin me smalls!

-B

[Serapy]

If they were sisters, then why did Vanille touch Fang's boobs and checking her butt out?

[Jessweeee♪]

As others have pretty much said, Oerba is a very close-knit community. They likely aren't sisters by blood but they were probably raised as if they were.

[dunit697]

kinky

[Loony BoB]

clans yes are mentioned in the game, but they both hail from Oerba which is the main point to get here. People lived in apartment style housing in big familial accomodation settings. because of this closeness, everyone treats each other as members of the same family, even if they aren't blood related. they live, sleep, eat and work together and that definitely strengthens those bonds.

While they both "hail" from Oerba, they were part of an orphanage. Both of them truly "hail" from different clans. Genetically they are of different families, but they are in all intents and purposes adopted sisters.