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Emma has been left to her own devices since she was very young. No one takes the time to point out her flaws because she is so well loved, so sweet, and so completely spoiled by her father.
Mr. Knightly isn't captivated in the same way the others are.... he sees her faults and their origins, and because he is introduced into the story as an outsider, he can point those flaws out.
"Emma is spoiled by being the cleverest of her family. At ten years old she had the misfortune of being able to answer questions which puzzled her sister at seventeen. She was always quick and assured; Isabella slow and diffident. And ever since she was twelve, Emma has been the mistress of the house. In her mother she lost the only person able to cope with her. She inherits her mother's talents, and must have been under subjection to her."