Grandma Lokai was an orphan caretaker who owned her own orphanage at the top of Hiroku Canyon. She was known to treat her guests like princes and princesses, often dressing them up in crowns, tights, and other formal attire.
Grandma Lokai found Toph, Momo, and Appa upon their separation from the rest of Team Avatar. Excited at the arrival of new guests, she dressed the trio in royal clothing and treated them like young children, referring to Toph as "granny's little princess". Katara and Sokka arrived soon after, having just escaped a band of Earth Kingdom thieves. Delighted, Grandma Lokai ordered for more tights, robes, and crowns to be fetched.
Upon his arrival, Aang attacked Onku, one of Grandma Lokai's helpers, not knowing that the establishment was an orphanage. Katara broke up the fight after seeing a picture of Grandma Lokai with Onku and the thieves she and Sokka had encountered earlier, realizing that Lokai was an orphan keeper. Grandma Lokai apologized for the confusion and offered beetle-worm soup to the group.
As suggested by her quote "It was nicer before the War. Before the children stopped coming," Grandma Lokai cared for children at her orphanage before the Hundred Year War began, making her well over 100 years old.