Continuity mistake: Right after Princess Mia and Andrew meet and are walking on the beach, a shot of them shows Princess Mia's scarf around her neck from the front with the ends blowing very visibly out to the back. Then it cuts to the press corps and then back to Princess Mia and Andrew. You can see her scarf is now on wrapped around the back of her neck with the ends her coat. Then we see her hair move first as her scarf is pulled (blown off?) from a string or wire pulls it off from the back.
Continuity mistake: When Princess Mia and Nicholas kiss by the fountain, their arms change position between shots. (00:47:55)
Continuity mistake: When the Queen is listening to the problems of the Genovians, we see a shot of the other Genovians waiting in line for their turn to speak with the Queen. The next person who speaks to the Queen is Jacqueline, but we didn't see her in line, and after that is Tiny Duval, but we didn't see him in line either. (00:38:35)
Continuity mistake: In the scene where Nicholas asks if he can help Princess Mia with her archery, he has her take her stance, then says to lower her elbow. We see Nicholas reach up to put his hand on her shoulder (his right hand is seen through Mia's forearm and shoulder because her elbow is still up so high). Nicholas then says anchor her right hand to her mouth, to touch her mouth. Then he says to relax her hand on the bow as he reaches up to put his left hand around her bow hand. We then see Nicholas reaching up to put his right hand on Mia's shoulder again but this time we see it over the top of her forearm because her elbow has been lowered considerably.
Continuity mistake: Near the beginning, at Princess Mia's birthday ball, we see a man in the purple and gold palace attire serving champagne on a tray downstairs. The next shot in the scene has Queen Clarisse introducing Princess Mia and then we see two men dressed in purple and gold ready to open the doors for Princess Mia's entrance - but one of the two men is the same man, who just seconds ago, was downstairs serving champagne.
Continuity mistake: When Gretchen is telling Nicholas that his uncle is up to something, her robe changes from purple to blue and back to purple in three different shots.
Continuity mistake: When Princess Mia is being "scolded" by Queen Clarisse in the Queen's suite, Princess Mia is reclining on a pillow the same color as the sofa and another pillow that is white/cream with fringe. The white pillow with fringe is partially up on the other, darker sofa pillow. Then we see a couple of shots of Princess Mia talking to her grandmother and the white, fringed pillow is flat down on the sofa under Princess Mia, not on the other darker, sofa pillow. After Princess Mia leaves, we see a shot of the sofa and the white, fringed pillow is now back up, partially on the darker pillow of the sofa.
Continuity mistake: When Princess Mia and Andrew are running after her scarf at the seashore, we see Brigitte and Brigitta also running after the scarf, just as Mia says, "I've got it." But as soon as Andrew and Mia grab the scarf, the next shot shows Brigitte and Brigitta facing the opposite direction and holding parasols, standing behind Andrew's parents.
Continuity mistake: After Princess Mia and Nicholas fall into the fountain, we see Nicholas come up out of the water and he is just a little to the right of the statue and his tie is not over his shoulder. The scene switches to Princess Mia's head emerging from the water. When she looks over toward Nicholas, the shot shows him now way over to the right and his tie is now over his shoulder.
Continuity mistake: After Princess Mia and Nicholas kiss by the fountain, as Mia says, "Stop trying to confuse me", she is about to walk past the statue. In the next shot, she's already passed it. (00:48:10)
Continuity mistake: When the Queen is being served chocolate cake by Nicholas, the blob of cream is smaller in the close-up than in the following wide shot. In the last shot of the scene, it's even bigger, without anyone touching the cake. (00:43:30)
Continuity mistake: In the courtroom scene when you see a man sleeping and leaning to the left, but the next shot of him, he's leaning straight up.
Continuity mistake: When Queen Clarisse is getting ready to mattress "fly", we see Asana, Lilly and Princess Mia lined up front to back from the post at the top of the slide to the back which has Mia near the doorway by Queen Clarisse, just as Asana asks, "Is she really going to do this?" Then as Queen Clarisse jumps on mattress, we see a shot of Asana, Lilly and Princess Mia lined up across the view, with Asana on the stairs and probably down a step, Lilly mostly behind the balloons and Princess Mia between post and the Queen, almost where Asana was before. After the Queen successfully reaches the bottom standing, the trio are back to their previous position, cheering the Queen.
Continuity mistake: When Queen Clarisse wakes up Lily in Princess Mia's bed, the arrangement of the pillows changes between the first shot of the scene and the shot where Lily turns around. (01:16:05)
Continuity mistake: When we see Asana mattress surfing, the mattress she comes down the slope has no label on the front. But when she reaches the bottom, there is a label (or two) on the top front center. (01:01:00)
Continuity mistake: When Princess Mia and Nicholas duck into a closet to finish discussing the "lie-dance," we see Nicholas reach across to turn off the closet light. As he touches the light switch, we see he has a wristwatch on. But the very next shot is a close-up of him actually twisting the switch, and either he has no watch on or it is now under the sleeve. (00:33:50)
Continuity mistake: After Andrew kisses Mia, in the shots facing Mia, her hair is blowing in the wind. In the shots from behind her, there's no wind. (01:18:15)
Continuity mistake: After Princess Mia says, "That's enough flaming ones for now", Brigitte and Brigitta nearly get hit by another arrow. Then when Nicholas shows up, they are holding fire extinguishers, even though Princess Mia are using regular arrows and has said no more flaming ones.
Continuity mistake: As Princess Mia is coming down the aisle of the church, she starts to hesitate about three rows from the back. As we see her from the front of the church, she is very near the back when she stops to address everyone. But as she hands her bridal bouquet to the gentleman, he is close to halfway down the aisle and we can see a woman in a pink hat next to (behind) him and a woman in a lavender hat right behind her (who is then right behind the bridal bouquet man). Behind them, down the aisle towards the back, is a woman in a blue hat and farther back is a woman in a pink hat. But the next shot is a long shot from the front and the man holding the bridal bouquet is very near the back and there are not enough rows to hold the women in all the different colored hats.
Continuity mistake: When Princess Mia is eating ice cream in the kitchen, a blob of ice cream appears on the left corner of her mouth for one shot, then disappears.
Answer: My guess is because Mia and Michael didn't actually start dating until the third Princess Diaries book. The second and third books were all about Mia trying to get Michael to go out with her, and since they went out at the end of the first movie, they couldn't base the second movie on the second book.