Peggy, who had thought up this game, and Maddie, her inseparable friend, were always the last to leave. Finally Wanda would move up the street, her eyes dull and her mouth closed, hitching her left shoulder every now and then in the funny way she had, finishing the walk to school alone.
 
     Peggy was not really cruel. She protected small children from bullies. And she cried for hours if she saw an animal mistreated. If anybody had said to her, “Don’t you think that is a cruel way to treat Wanda?” she would have been very surprised. Cruel? Why did the girl say she had a hundred dresses? Anybody could tell that that was a lie. Why did she want to lie? And she wasn’t just an ordinary person, else why did she have a name like that? Anyway, they never made her cry.
 
     As for Maddie, this business of asking Wanda every day how many dresses and how many hats, and how many this and that she had was bothering her. Maddie was poor herself. She usually wore somebody’s hand-me-down clothes. Thank goodness, she didn’t live up on Boggins Heights or have a funny name.
Explanation:

Peggy, the one who started the dress game and her best friend, Maddie, were usually the last to leave the school. After hearing the funny talk, Wanda would move slowly along the street with her lips shut. Her eyes seemed very dull. She continued the walk to school by herself, sometimes bending down her left shoulder strangely.

The narrator then describes the character of Peggy. She was not a cruel girl. She saves many small children from the bullying of other classmates. Also, she would feel pity and cry for hours if she saw any animal being mistreated on the road. In addition, the narrator said that if anybody asked Peggy why she was cruelly treating Wanda, she would be surprised. She would reply to them that she was not treating her cruelly. She would ask why the girl told lies to everyone that she had a hundred dresses. While hearing it, everyone can understand that Wanda was telling a lie. Then she asked why there was a need to tell a lie. After telling all these things, Peggy would say that Wanda wasn't an ordinary person. If she was normal, why did she have such a weird name? Moreover, the girls had never made her weep.

The narrator then said that when Peggy asked Wanda how many shoes, dresses, and hats she had, Maddie felt embarrassed. While hearing this, Maddie felt bothered about something. The thing which bothered Maddie was that she also belonged to a poor family. She used to wear dresses which were offered by someone or reused dresses. The narrator said, "Thank goodness" she didn't have a strange name or live up on Boggins Heights. Here the expression "Thank goodness" means that thank god, as she was not coming from Boggins Heights or having a strange name, Maddie escaped from the fun of Peggy.
 
Meanings of the difficult words:
 
S.No
Words
Meanings
1
Inseparable Unable to be separated or treated separately
2
CruelExtremely unkind and unpleasant and causing pain to people or animals intentionally
3
MistreatTo treat a person or animal badly, cruelly, or unfairly
4
BulliesSomeone who hurts or frightens someone else, often over a period of time, and often forcing them to do something that they do not want to do
Reference:
National Council of Educational Research and Training (2007). The Hundred Dresses I - Eleanor Estes (pp. 63 - 72). Published at the Publication Division by the Secretary, National Council of Educational Research and Training, Sri Aurobindo Marg, New Delhi.