“I've never seen a diamond in the flesh”

Lorde – Royals Lyrics on LyricsMode
EXPLANATION
It obviously not literally seeing an actual diamond. It was pointed towards a certain person, whom singer describes him/her as valuable/as beautiful as a diamond. Thus the singer implied like a diamond embedded on the flesh of the person.
EXPLANATION
Seeing someone or something in the flesh means seeing something that's literally in front of you. This lyric means she's never seen a "real" diamond with her own eyes.
EXPLANATION
They haven't seen a celebrity in real life, are stuck just aspiring to be like them or wanting to meet them/be them.
EXPLANATION
It's highlighting that she isn't rich, in fact she is quite poor. She hasn't seen a real diamond before, she doesn't have the money to buy one.
EXPLANATION
Interpreted it this way:
The association of diamond, something valuable and priceless, with flesh (meaning human flesh). She probably means that she never saw a human with a character as pure as good and priceless as a diamonds, indicating the imperfection of the human race, and like, how everyone is tainted one way or the other.
EXPLANATION
When you say you're seeing someone in the flesh, it means that you've never seen someone in person. What Lorde means by this is that she's never seen someone who's so special and better than everyone in the world in person, or even seen someone who is more precious and more perfect than anyone else. Everyone is equally unique in their own way. That's what I think she means by this phrase.