The pyramid illustrates the relative rarity, and thus the relative value, of each grade of diamond. A carat is the universal measure of weight for a diamond. It's the easiest of the 4Cs to determine, but two diamonds of equal size can have very different values, because the quality is still determined by the color, clarity and cut. Larger diamonds are found relatively infrequently in nature, which makes them the rarest. For example, fewer than one percent of the population will ever own a diamond weighing one or more carats.
Clarity is an indication of a diamond's purity.
In all diamonds, except the most rare, tiny traces of minerals, gasses, or other elements were trapped inside during the crystallization process. These are called inclusions, but are more like birthmarks. They may look like tiny crystals, clouds, or feathers and they're what make each diamond different and unique. Many of these birthmarks are not visible to the naked eye. The clarity of a diamond is graded by how many, how big, how visible, and where the inclusions are.