I posted a book with a huge Wish List, only to watch it turn over to the next person four times before someone requested it.

Leaving aside the problem of people who won't come decline a book they don't want to speed things up and just let it time out after two days (the other books I posted at the same time are long mailed), does that count as FIVE wished granted to the people on the Wish List?

It took five people off the list so their wishes were granted in a way, but it implies five copies went out, which is misleading. Or does it just drop the list by five and say ONE wish granted? 

I've wondered about this since a hard-to-find book on my Wish List suddeny had TWO wishes granted one week. I find that implausible--but it's possible someone declined it and the second person took it. Does anyone know how it works?

The biggest impact is that, if FIVE wishes were granted, the algorithm pushes it up in the calculations of when I'll get it--only to have it drop back again next week. That esimate seems to have a hair trigger on it, but that's another topic, I suppose.

Yes, each time an offer is made, that counts a wish granted, whether the other member accepts or not.

The estimate calculation is very simplistic. In my observations, it's most accurate for fiction that's on the current best-seller list and has been out at least 4 weeks. E.g. if you're around 100th on the wish list for Nora Roberts' or Janet Evanovich's next book, then you'll have a pretty accurate estimate of when you'll get a copy after the book has been out for 4 weeks. That allows time for the number of copies that are circulating to stabilize and for people who decide not to wait to buy a copy and remove themselves from the list. Before that, the numbers are ramping up too fast and the estimates are too long.

If you are watching a book that has been out a while and has 1 or 2 wishes granted last week, then the estimates are almost always too short.

No sure about this situation.  But I do know that the book I had wishlisted, then fulfilled by another member but never mailed (cancelled b/c her husband decided to keep the book), appeared as 'fulfilled' on my wishlist for the next year or so until I finally gave up and purchased a copy.

it appeared as 'fulfilled' on my wishlist for the next year or so

Once a wishlist book has been offered to us, it is removed from our wish list.  If the sender cancels, it will go back on our wish list.  If it appears with a red background, then it's on "hold" and we can unhold it.  But the wish list doesn't show us wishes that have been fulfilled.  When they're fulfilled they go to the transaction archive.

ETA: and the software clicks the "wish fulfilled" counter each time a book is offer to a wisher, as described above.  It doesn't wait for the outcome of the transacton.