How incest as a taboo is defined is dependent upon the culture you are raised in. If I remember correctly, Cleopatra was the result of 27 generations of brother-sister marriages. In some cultures marrying your first cousin is ok, in others, second cousins are ok. In some to marry an uncle is ok. In others, several generations. Every society defines it differently. Why there are rules in the first place has never been settled. Some have held that it was a 'natural' mechanism for not allowing a particular weak DNA characteristic to become predominant. Others have said it is mainly a cultural taboo, that allowing relations between family members would not allow for stable family relationships needed by all societies to develop culturally.
Most of the taboos that are around were first developed when people were living in small to medium sized communities/tribes/villages of 100-200 people. Most pairings would take place within the small community as most people never had any contact outside their own communities during their entire lives. Having family taboos for pairings allowed inter-family bonds to be established which strengthened the community as a whole and at the same time allowed individual families to be stable family units without sexual competitions within an individual family.