The novel Obasan is titled after Naomi's Aunt Ayako, who she calls Obasan. It's almost strange that Kogawa chooses this title, since the novel is more of Naomi's story than anyone else's. We're pretty sure the total number of words that Obasan speaks throughout the whole novel is less than twenty. So: why her?
It helps to remember that in Japan every older woman can be called obasan. It works with all family relations, including big brother (oniisan), big sister (oneesan), and grandmother (obaasan). Naomi could call her Aunt Aunt Ayako, or even Ayako Obasan, but she doesn't. She's just Obasan.
By having Naomi call her Obasan, Kogawa links the character of Obasan to the universal idea of the older woman. Obasan is not just Naomi's obasan, but also the obasan of all Japanese Canadian children who had to be protected during the internment period. Probably many sansei could recognize her in their own families.
The title is also a reference to Japanese mythology. In Japanese fairy tales the character of Obasan turns up all of the time, and she are always loving, diligent, and hardworking older women. Huh: that sounds a whole lot like the obasan we know and love. So the obasan in Obasan (are all these obasans making you dizzy, a la Being John Malkovich?) is a callback to the Japanese version of the old Wise Woman that shows up a lot in Western fairy tales. She's the Japanese fairy godmother.
By titling her work Obasan, Kogawa is saying that the novel is not just Naomi's story, or even the story of Naomi's family. It's the story of all the Japanese Canadians, and all of their obasan.