Nanny McPhee appears at the door of a harried young mother who is trying to run the family farm while her husband is away at war. But once she’s arrived, Nanny discovers that the children are fighting a war of their own against two spoiled city cousins who have just moved in. Relying on everything from a flying motorcycle and a statue that comes to life to a tree-climbing piglet and a baby elephant, Nanny uses her magic to teach her mischievous charges five new lessons.

The story is set in New York which is lit up with Christmas lights. Tokyo Metropolitan Police officer Akari Kido is directing traffic while on her international exchange training program, when a witch-like character pulls a "Christmas Party" prank. Just before a runaway trailer truck smashes into Akari, a mysterious girl suddenly appears and shouts, "I'm going to protect New York and Akari!"