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Megan is Howl's older sister. She lives in our regular old world (where castles don't move), in Wales. She clearly thinks that Howl is a no-good rotten loser who mainly exists to embarrass her and her husband, Gareth:
You're a disgrace to me and Gareth, lounging about in those clothes instead of buying a proper suit and looking respectable for once, taking up with riffraff and layabouts, bringing them to this house! Are you trying to bring me down to your level? (11.45)
When Sophie meets Megan, she realizes why Howl hates to be pinned down to anything: Megan's merciless lectures of Howl would make anyone want to back out and run away.
Howl later explains that Megan is so angry with Howl because she doesn't want to be as respectable and straight-laced as she is. And we see hints that she might be more imaginative than she lets on: after all, her house is called "Rivendell" (11.6), which is, of course, the name of Lord Elrond's home in the Lord of the Rings.
Even though Megan's relationship with Howl is so strained, Howl still runs to rescue her when Calcifer warns him that the Witch has found his family in Wales. Sophie and Michael watch as the Witch tries to enchant Howl's family, but Megan—who is nothing if not strong-minded—is resisting as hard as possible: "Sophie could see Megan's arms gesturing and Megan's mouth opening and shutting. She was clearly giving the Witch a piece of her mind, but she was being drawn toward the Witch too" (20.70).
Megan may have her flaws, but she's also tough. And it's reassuring to know that no matter how bad their relationship may be, Howl isn't going to leave his sister to be destroyed by the Witch of the Waste.