Viola, still in disguise as Cesario, comes on stage and is followed by Malvolio, who catches up with the lad and asks him if he is indeed the young man who was with the Countess Olivia only a short time ago. Cesario admits that it was he, and Malvolio holds out a ring to him — seemingly a ring that Duke Orsino sent to Olivia, one which Cesario left behind by mistake. Malvolio adds sarcastically that Cesario would have saved Malvolio the time and trouble of returning it if Cesario had not been so absent-minded. Scornfully, Malvolio tells Cesario to return to his master, Orsino, and tell him that Olivia "will none of him," and furthermore he warns Cesario that he should "never be so hardy to come again in his [Orsino's] affairs."
Cesario is dumbfounded by Malvolio's high-handed manner; then, matching Malvolio's insolence, he says, "I'll none of it." Malvolio is incensed at Cesario's haughty manner and flings the ring to the ground; if Cesario wants it and "if it be worth stooping for, there it lies." With that, he exits abruptly.
Left alone, Viola ponders all that has happened; she is absolutely certain that she left no ring with Olivia, yet why does Olivia believe that she did and, moreover, why did she send Malvolio with such urgency to return it? Then she realizes what may have happened, and she is horrified: can it be possible that Olivia has fallen in love with Viola's boyish disguise? She is aghast: "fortune forbid my outside have not charmed her!" Thinking back on their interview, however, she clearly recalls that Olivia certainly "made good view of me; indeed, so much / That sure methought her eyes had lost her tongue."
The evidence is clear. Olivia has indeed fallen in love with Cesario; when she spoke to the young man, she spoke in starts and spurts, and her manner was vague and distracted. Now "the winning of her passion" has sent Malvolio after the "boy" whom she believes to be the object of her love.
Viola pities Olivia; it would be better for the poor Olivia to "love a dream." Viola recognizes that "disguise . . . art a wickedness." She aptly calls disguise a "pregnant enemy," an enemy able to play havoc with "women's waxen hearts." Like Olivia, Viola too is a woman. She knows the anguish of love: "Our frailty is the cause, not we," she meditates, "for such are we made of."
This is a dreadfully complicated knot. Viola loves her master, Orsino, who loves the beautiful but disdainful Olivia, who loves the handsome Cesario (who is not a man at all, but is Viola, in disguise). Viola calls on Time to untangle this knot, for she is incapable of doing so herself; "it is too hard a knot for me to untie."
At the end of Act I, Olivia sent Malvolio to catch up with Cesario and return a ring that Cesario did not leave behind. In this short scene, Malvolio is seen returning the ring in a very scornful, haughty, and arrogant manner. The scene serves in part to bring out Malvolio's rudeness and his ill nature. He is extremely insolent to a youth who has caused him no personal injury. His unwarranted enmity is seen in the manner in which he delivers the ring. Malvolio's action here again prepares the reader for delight in the tricks that will later be played on this insolent man who shows nothing but scorn for any person who is not above him in social status.
While this scene does not advance the plot, it does show us how intricately Viola is caught up in the entanglement. She suddenly realizes that Olivia has fallen in love with an exterior facade — and not with the inner person. This realization allows her to comment on the "frailty" of women who are constantly deceived by disguises of one sort or another. When Viola cries out, "Disguise, I see thou art a wickedness, / Wherein the pregnant enemy does much," she speaks with allusions about the "wickedness" that arises from a woman's being constantly deceived by disguises, ever since Eve was first deceived in the Garden of Eden. Yet, Viola must retain her disguise because, as a girl alone in a foreign country, she would be powerless to defend herself, as we see later when the cowardly Sir Aguecheek threatens her.