Clarity is a measure of a diamond’s imperfections.  More to the point, clarity measures a diamond’s lack of imperfections.  There are two types of imperfections: inclusions and blemishes.  Inclusions are internal imperfections, while blemishes are located on the surface of the stone.

Inclusions occur at the time of a diamond’s geological formation.  Because diamonds are formed by massive heat & pressure, sometimes small crystals will be lodged inside them.  This is a common inclusion.  Additionally, in some cases an irregular atomic structure can cause streaks (known as graining) and create inclusions.

Blemishes occur after the formation of the diamond.  These are typically caused by errors in the manufacturing process, and can be nicks, scratches, chips, etc.

Some inclusions are visible to the naked eye and some are not.  Diamonds free of inclusions are very rare and as a result are more scarce and valuable.  Therefore, diamonds with the fewest and least visible inclusions tend to have the highest value.