Aunt Wu was an elderly citizen of Makapu Village who was able to predict the future. The people of Makapu were so confident in her abilities that they abandoned going up the nearby volcano to check if it would erupt, instead relying on Aunt Wu's predictions. Well-regarded for her free and accurate readings, every prediction she made was taken as gospel by the village at large. Her methods of divination ran from palmistry to oracle bones and cloud reading. She was helped in her hut by her assistant, Meng.
When she was a little girl, Aunt Wu received a cloud reading book, and when she was old enough, she studied with other fortunetellers, learning different methods such as reading bones and clouds. She spent many years traveling the Earth Kingdom, telling people's fortunes in each town she visited. In 80 ASC, she arrived in Makapu Village near the active volcano Mt. Makapu. She knew that the village was where she was meant to be, as the people in the town needed her, having become reliant upon on her fortunes.
Team Avatar visited Makapu in early 100 ASC, and Wu performed readings for them. She predicted that Katara would marry a powerful bender while Sokka would live a life of pain and misery, most of which would be self-inflicted. She also foretold Aang's future battle between the forces of good and evil. When a curious Aang asked about his potential love life, she told him to simply trust his heart and he would be with the one he loved.
When Aunt Wu's cloud readings predicted the nearby volcano would not destroy the village, Katara and Aang accepted the reading, while the skeptical Sokka grew frustrated with the populace's blind faith in the fortuneteller. After this, an enamored Katara returned to Wu for several more predictions, which began to annoy the fortuneteller. She finally shut Katara out after she asked if she should have mango or papaya for breakfast.
Team Avatar later discovered that the volcano was in fact set to erupt, and borrowed Aunt Wu's Book of Clouds, using a combination of water and airbending to manipulate the clouds and convince the villagers their home was in danger. After they saved the town, Aang returned Wu's book to her. She seemed angry at first, accusing them of playing with the clouds, but subsequently remarked that the idea was very clever. Surprisingly, Aunt Wu freely admitted that she did not believe in any kind of predestination, claiming that her predictions would come true only if a person wished them to.
A short time later, June, PrinceZuko, and Iroh visited Makapu Village in search of the Avatar. Aunt Wu thought Iroh was handsome, and asked if he wanted his fortune told.
Wu may be written in Chinese as 巫, a surname meaning "shaman" or "sorceress". Shamanism was widespread in ancient China from the Shang dynasty until the Han. During the Shang and Zhou dynasties, their chosen divination technique was the reading of oracle bones, which Aunt Wu demonstrates in the show.
Wu has the same pronunciation as "woo", a slang term used by skeptics to describe topics they consider superstitious nonsense, such as astrology and fortune telling.
Aunt Wu's prediction of Katara marrying a powerful bender came true, since Aang and Katara ended up marrying and having three children.
So far, all of Wu's predictions have come true, including those for her village, Aang, Sokka, and Katara.