Question

Why do the courtiers call the prince ‘the Happy Prince’? Is he really happy? What does he see all around him?

Answer 1

Because the prince was constantly happy the courtiers dubbed him "the Happy Prince." He lived in a castle where sadness was forbidden, 

so when he was living, he had no idea what tears were. But after he passed away and was turned into a statue, he was unhappy about his city's condition and shed tears. 

All the ugliness and despair of the city was visible to him.