I'm looking at the improved familiar feat and it says that, does that mean if I'm a LG character I can pick a familiar who is LG, NG, LN, or N?
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If a character possesses an alignment that's Lawful Good, one step away on each axis means as a far away as Neutral for the Lawful component of Lawful Good, and as a far away as Neutral for the Good component of Lawful Good.
Here's the chart of alignment steps. While the text reads
the feat Improved Familiar reads
Emphasis mine. Neutral is one step from Lawful on the L/N/C axis while Neutral is one step from Good on the G/N/E axis. Thus taking both steps along both axes allows a LG character to select a N improved familiar, despite the text's 2-step diagonal rule.