Thank you,
vinny. My fault that I was using jargon.
British nationality law has a complex history. Before 1949, all people who owed allegiance to the Crown, across the Commonwealth, were all British subjects. The 1940s started seeing the development of citizenships in the modern sense. in 1949, those British subjects who were related by birth or descent to the UK or one of its colonies became Citizens of the United Kingdom and Colonies, CUKCs for short.
In the 1960s and early 1970s, as more and more colonies became independent, in order to avoid a lot of colonial citizens landing in the UK (as an aside, one can see the worry of mass immigration decades before Brexit, when there was free movement between the UK and its colonies), the concept of the Right of Abode was created in 1971, which was limited to those CUKCs who had a direct connection (by birth, registration or naturalisation) with the UK itself, not a colony.
Finally, in 1983, those CUKCs who had the Right of Abode in the UK became British citizens, while those CUKCs without the Right of Abode-RoA (mainly CUKCs from the colonies who had not automatically become citizens of their newly independent countries, such as the Indians resident in Uganda, Kenya and Tanzania) became British Overseas Citizens, who had the right to a British passport (see
types), but not the right to live in the UK or the right to pass their status on to their children, which is why I asked you for the details of the last known passport.
That is why, when assessing the claims of somebody born outside the UK before 1983, one needs to analyse much more than the current rules, which have applied since 1983.
As your aunt was born before 1983, she'd have had CUKC status and would have acquired RoA at some time, as her last known passport stated her nationality as "British Citizen". In order to assess if she can pass it on, we need to assess how she acquired each of the two statuses, CUKC and RoA, which she may have done together or separately.
And if she is able to transmit her British citizenship (most likely because she herself was also registered as a CUKC by her father), then HMPO (Her Majesty's Passport Office) will require
original documentation of her (your aunt's) status of CUKC and RoA before 1983. Her last known passport will not be sufficient. And even if she were to be able to transmit it, it would be limited to one generation outside the UK. So her grandchildren will definitely not qualify.