The clarity of a diamond refers to number and distribution of flaws in a diamond. Every diamond has some sort of a flaw in it and these are natural diamond "fingerprints". The fewer the flaws, the more valuable the diamond. There are some diamonds without flaws, these diamonds are categorized as flawless or internally flawless and are very rare.
The Gemological Institute of America grades the clarity from Flawless (FL), very very slight inclusions (VVS), very slight inclusions (VS), slight imperfect (SI) and imperfect (I). Imperfect diamonds are further subdivides into classes I1 or I2. Visually, the imperfections in a diamond can be illustrated as follows: