With Men in Black, though they had the alien technology to remove memories, they were still human and had to physically remove evidence. All Jeannie had to do was blink, and even physical things that had been radically changed by her magic were reverted back to normal.
One can only make the assumption that she did the same thing sometime after the end of "This Is Murder" in order to get rid of everything she had created in granting Tony's big wishes. Otherwise, the news (and people's conversations, curiosity, and fear) would be centered on the continuing changed status of the Gobi Desert, Alaska, and Bermuda. So, she likely blinked Time changed to erase people's memories of it, too.
(By the way, I think of it more like changing reality. That way, she doesn't have to both change physical things back to 'nothing' or something else, and use telepathy-magic to change or erase memories, if reality is simply different than it had been before. Plus, if she had to change memories, either she or the magic would have to know what all of those memories were and what they would have likely been had reality been different from what it became.)
It also makes me wonder what all Jeannie revealed to the princess, because if her memories got erased too, things might not have led to the dissolving of the feud. And if she remembers the weather and water changes that were heard and seen on the news, then she'll be questioned about her sanity for remembering things that never happened (especially such big things at that.)
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