lol, kids can be awkward and direct. I think you handled it well.
You could do it playfully next time or invite them to see up close in the sunlight if it's really black, then show something black near by and something dark green, and ask which color your eyes are more like.
Maybe they don't even know colors that well, and you could play 'colors' then. (They love it if they're small enough. Approximately how old is your niece?)
Little kids can say 'dog' when they see a cat, from afar they both look similar (both have 4 legs and 2 ears). Imagine if you were a Martian and had to discover it all anew. Some things may be approximations that work enough for them until they learn better...
They need to learn basic rules of politeness, sometimes. I got asked once 'Why do you have this here?' (I had a pimple on my nose, in my teens or so, I was terribly embarassed
![Big grin :D :D](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)
, then said it was probably because of too much chocolate and greasy food..)
I have a bit of baby phobia of very little kids, once they're 3+ or 4+ I think they rock! They can be so much fun and have such crazy imagination sometimes.. I like making up stories with them..
(In moderate amount, too much contact can be a bit exhausting lol.)
They LOVE joking and exaggerations, mostly! They also like to be 'whirled' or tossed about, my back usually isn't up for that sort of fun anymore.. Some like to be tickled etc. when you are more comfortable with each other...
They are indeed much more direct and easier to make friends with. Teenagers can become a bit awkward again, it depends. Being a teen in today's world isn't easy though, so I sympathise! And try to remember what it was like, sometimes it helps..
There are some books on how to talk to kids and teens too.. Or shows like Nanny 911 or Supernanny.. Some very useful tips there..