Clarity characteristics in diamonds are classified into two types: inclusions which are internal, confined to the inside of the diamond, and blemishes, which are external characteristics that are on the surface of the diamond.
AGS Rock Stars note: Blemishes typically have less impact on the clarity of a diamond than inclusions.
Inclusions usually form in diamonds as a result of the tremendous heat and pressure deep in the earth, where diamonds form, or are caused by their violent journey to the surface of the earth caused by volcanic eruptions. These events can cause irregularities in the atomic structure of the diamond.
Blemishes are the surface features on a polished diamond that are usually a result of the polishing process, or wear and tear on the diamond.
Diamond graders use their expertise to analyze the size, nature, number, location, and relief of the inclusions and blemishes to decide what clarity grade is most appropriate for your diamond.