I am giving my niece an ipad, it is synced with my other ipad, iCloud and MacBook, I want to setup the iPad for my niece and have it operating on its own

Settings > General > Reset > Erase all content and settings

This will set it back to factory default 😉

I suggest Settings > General > Reset > Erase all content and settings

Then your niece will receive an iPad which, software- and content-wise, will appear as if it's fresh out-of-the-box. It will have no ties whatsoever to any devices, iCloud, etc. that you had been using.

The above will be enough if the iPad is running iOS 7. If it's on an earlier version, there is some more to clear out.