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Traditionally, close friends, cousins, aunts, sisters-in-law, or co-workers of the mother-to-be hosted baby showers. Because gifts are central to showers, having a member of the honoree's (or husband's) immediate family host appeared self-serving. Today it is appropriate for anyone to host a baby shower, as long as there's a legitimate reason. For example, some parents-to-be live far from their hometowns, and their mothers and siblings want to host a shower so that long-time friends can attend.
This is a change in tradition that some who learned etiquette in their youth may not be familiar with. Because showers are close, intimate affairs for close friends and family, if anyone feels uncomfortable hosting it can be a good thing to talk about. As times have changed and lives have become more mobile people have reason to host in different communities for all kinds of different reasons. Stick to the rest of your shower etiquette, whomever is hosting, and you should have a great party.