I think it’s important to note that I haven’t found any interviews from Sydney where she specifically states if she is Native Hawaiian or not. If she really isn’t, the role of Nani obviously needs to be recast immediately. Lilo & Stitch was the first big Disney movie about Native Hawaiians, and it specifically incorporated their culture and struggles. As a Polynesian woman myself, it was first mainstream representation I had as a kid. To cast someone who doesn’t have Native Hawaiian blood would be infuriating.

Source: https://www.buzzfeed.com/morgansloss1/david-lilo-and-stitch-recast-kahiau-machado-racial-slurs