Some definitions of vain I have found:
- fruitless
lacking substance or worth; worthless
conceited; having an exaggerated sense of self-importance
foolish
given to ostentatious display
senseless or futile
an egotistical disregard of others
Lots of these seem to apply in one way or another.
"Lacking substance" may refer to his being pure structure that needs to be filled in with Law and Earthpower and percipience.
"an exaggerated sence of self-importance" may refer to his awareness of his purpose, to the extent that nothing else matters to him.
"egotistical disregard of others" may refer to one of Vain's obvious traits.
"given to ostentatious display" may refer to the perfection of his physical form.
Some combination of these is, I feel, the answer.
Note that Vain was created by the ur-viles. The fact that the Viles named themselves "Viles", and the ur-viles named themselves the new Viles, may indicate that there is some sort of propensity in ur-vile names for irony or humility or some other thing we may not understand.
Lastly, remember that Donaldson picked a name which would leave us on the knife's edge of trusting/mistrusting Vain. A name which is too positive or a name which is too negative would undermine Donaldson's purpose.
Pride, and Vanity, are also knife's edge words. Pride is a deadly sin, and yet pride is also often expected or allowed. Vanity is similarly accounted as a negative trait, and yet an utter lack of vanity is negative also.
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