Diana genuinely touched hearts. She filled a yawning gap between the public and the monarchy at a time when their validity was being questioned as never before. Unfortunately for all concerned the House of Windsor failed to recognise a rapidly changing world, the need for change and the asset they had in Diana. In fact, Charles was jealous of her.
Whilst the Queen was loved by many, she was remote, bound by archaic tradition and mostly silent. Diana was young, beautiful and charismatic and wanted to make the Royal Family relevant. Sadly they and their hopelessly out of touch advisers threw the baby out with the bath water.
Instead, they humoured Charles as he took advice on modernisation from Jimmy Saville who was middle aged, not remotely considered a modern icon and never had been. He was also known behind the scenes (including to royal advisers) as, at best, unsavoury.
The royal family also indulged Charles' affair with Camilla Parker Bowles as it was considered quite acceptable for the Prince of Wales to have a mistress. They saw nothing intrinsically immoral in it or damaging to their own reputation. In fact they were decidedly irritated at his 19 year old wife's objections and branded her "difficult".
Diana's support for causes such as AIDS, homelessness and the abolition of landmines not only spoke to a new generation but to governments too and her campaigns were highly effective. She achieved more in her short life than many heads of state or politicians.
She would have made a good ambassador for Britain and Tony Blair was poised to offer her such a role but of course she died before that came to fruition.