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I bought my sister and iPhone and used my Apple id to help set up her phone. Now I want to delete her phone from my iCloud so she can set up her own Apple id. If I delete her device from my iCloud will it affect or remove any of the data on her phone?

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Removing the phone from your iCloud 'find my' structure won't in itself remove any data from the phone…
…but re-assigning it to a new owner will. It will have to be set up again from scratch.

As the phone is currently owned by your Apple ID, so are all the apps & the data stored within them. You can restore [most of] the apps, music etc if you set up Family Sharing but any data in those apps will not be transferred with them, as it still belongs to you.

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