A diamond is said to be flawless if no inclusion or blemish is visible under10 x magnifications.
Fewer inclusions enhance the passage of light through the diamond and make a diamond more rare.
Clarity of SI-1 or greater appears flawless to the naked eye (VS-2 for emerald, princess and radiant shapes). The presence of inclusions that are visible to the naked eye result in a clarity grade of SI-2 or SI-3.

FL = FLAWLESS
Flawless diamonds are nearly flawless even to the gemologist's eye.
IF = INTERNALLY FLAWLESS
Internally flawless diamonds have very minor surface blemishes but can not be seen by the gemologist's eye as well.
VVS1/VVS2 = VERY, VERY, SLIGHTLY INCLUDED
These diamonds have very, very small inclusions which are difficult for a gemologist to see even at
10 x magnification.
SI1/SI2/SI3 = SLIGHTLY INCLUDED
Diamonds with small inclusions which ARE usually obvious under 10 x magnification. However, they ARE difficult to see with the unaided eye, except for larger diamonds or occasionally with Emerald cut diamonds.
I1/I2/I3 = IMPERFECT
Diamonds with medium to large inclusions (piques) which are usually obvious to a gemologist with the unaided eye.
An I1 may have inclusions barely visible or located to the side while an I2 will have numerous inclusions that may be centrally located.