I read (can't remember where) that King George was very partial to Princess Elizabeth. It seemed as though he treated his Lascelles grandsons nearly as strictly as he'd treated his own sons when they were children, but he was far more relaxed with Princess Elizabeth. Princess Margaret was only about five when he died, so he wouldn't have related to her at all except as a young child.
Queen Mary, as Warren said, took a lot of interest in Princess Elizabeth's education and development; biographies have said that she was surprisingly indulgent of Princess Margaret because Princess Margaret knew how to be funny and daring and also probably because, as the younger daughter, she didn't have as much importance in the royal scheme of things. Goodness only knows what Queen Mary would have made of the Townsend affair, though. Something tells me the indulgent granny would not have been in evidence.
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