Guernsey is one of the Channel Islands in the British Isles. It is not part of the United Kingdom.
Wroetoshaw
Harry moved to the island when he was 7 and lived there permanently for around a decade before he left home and moved to London in 2014. This makes determining Harry's true nationality somewhat difficult, since the island is not technically part of the United Kingdom of Great Britain and Northern Ireland, yet is still a part of the British Isles.
Stereotype
One of the most common stereotypes related to Guernsey is the fact that its population is inbred, and all families living there are a result of incest. The Sidemen regularly joke about Harry having sex with his siblings and his fans have picked up on this.
More recently, as proven in Cards Against Humanity sessions, a new stereotype affiliated with the island is the idea that its residents mate with animals such as goats and sheep. Harry has admitted that he has no idea where this idea came from, and it is thought to exist purely among the followers of the YouTubers.