Factual error: No real archery instructor would allow Princess Mia or anyone for that matter, to shoot with people in front of the shooting line and that close to Princess Mia. And, the arrows aren't retrieved until all have been shot, not after every one.
The Princess Diaries 2: Royal Engagement (2004)
1 factual error - chronological order
Directed by: Garry Marshall
Starring: Anne Hathaway, Julie Andrews, John Rhys-Davies, Hector Elizondo, Callum Blue
Continuity mistake: When Mia takes the chicken out of the basket and it gets loose, we see the chicken run away, followed by Mia running after the chicken, and finally the palace guard falling amid a number of boxed, gift-wrapped presents. The only boxed presents that were visible in any of the previous shots were already on the floor, and there were none anywhere close to the palace guard that he could have knocked down as he fell.
Queen Clarisse Renaldi: A princess never chases a chicken.
Trivia: In the opening scene where Mia is introduced and waves to the crowd from atop a staircase, (wearing a big red dress) she accidentally flings a bracelet off her wrist, where a footman catches it. That is the same footman who catches the snail Julia Roberts flings in Pretty Woman, and he uses the same line "It happens all the time".
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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.