The Young Girl and Older Sister are the daughters of Father Gascoigne and his wife, Viola.
Future Press game guide description: "These sweet and innocent Yharnam girls are the daughters of Viola and Gascoigne. Their father left on the hunt and their mother departed shortly thereafter to search for him, leaving the girls alone amid increasing danger and uncertain prospects of survival. Their parents have not yet returned and, in their desperation, the younger daughter turns to you to locate them; sadly, you'll have to be the bearer of bad news regardless of how you decide to intervene, and your choices will have little effect on the outcome other than to determine the means of her demise."
The Young Girl and Older Sister are the daughters of Viola and Gascoigne. Gascoigne is a hunter who came from a foreign land. Together with Henryk, Gascoigne hunted for the Healing Church, and while they were an effective duo, Gascoigne would eventually part ways with the Church. Why he did this is unknown, but we do know that despite ending affiliation with the Church, Gascoigne continued to hunt.
Gascoigne and Viola raised their two daughters in their family home located in Central Yharnam. Each night it seems that Gascoigne would venture out to join the hunt against the beasts, such was his zeal for the kill, and addiction to the blood. While out on the hunts, his wife and daughters had no idea if he would ever return. Perhaps this worry would eat away at Viola, like the beastly stench that ate away at Gascoigne's humanity, so much so that on the night of the hunt in which the player character takes part, Viola has left her two daughters at home while she goes to find Gascoigne and bring him back. This is the situation the player finds the Little Girl in. The Little Girl mentions that she is home alone, indicating that the Older Sister along with Viola and Gascoigne, who we already know were not present, has also gone out. From this we can gather that Viola left the house in the care of her two daughters, promising to be home soon. Once she was gone the Older Sister must have, in a rather tellingly unkind gesture, passed her duty as caretaker on to her Little Sister who she told to look after the house.
Alone and afraid the Little Girl becomes desperate. So when she smells the familiar scent of a hunter standing at their window, she asks that hunter for help to find her mother. Whether the player tells her that her mother has been killed doesn't alter her fate. She will either venture out because she is seeking a safe place, or because she believes her mum and dad are waiting for her to find them. The Little Girl's ribbon can next be found in the stomach of a man-eating boar, implying a gruesome end.
After the blood moon is unveiled the Older Sister will appear. She is interested in where her Little Sister has gone and asks the player for help. Should the player give her the Little Sister’s ribbon the Older Sister will feign grief. As the player walks away the Older Sister can be heard gloating that she now has the "big white ribbon" of her Little Sister, without a care for the girl’s fate. Evidently the Older Sister was after this white ribbon all along and it is implied she left the Little Sister alone and in charge, intending for her to leave the safety of the home to venture out and perish all so the Older Sister could have the ribbon. One possible explanation for this psychopathic decision may be the influence of the blood moon upon Yharnam’s people which heightens their beast-like qualities. In this case it has brought out the jealousy the Older Sister feels for the younger expressed in the most repulsive way. The description of the ribbon calling the Little Sister a "pretty young girl" implies that the Little Sister was just that. The Older Sister was possibly jealous of the love and attention the Little Sister received and may have believed that if she had the Little Sister's ribbon she would instead receive that love and attention. These are clearly childish thoughts, but the Older Sister may have believed them wholeheartedly.