The acquaintance she [Harriet] had already formed were unworthy of her. The friends from whom she had just parted, though very good sort of people, must be doing her harm. They were a family of the name of Martin, whom Emma well knew by character, as renting a large farm of Mr. Knightley, and residing in the parish of Donwell -- very creditably she believed -- she knew Mr. Knightley thought highly of them -- but they must be coarse and unpolished, and very unfit to be the intimates of a girl who wanted only a little more knowledge and elegance to be quite perfect. She would notice her; she would improve her; she would detach her from her bad acquaintance, and introduce her into good society (Ch. 3)

"Know by character" I understand that means "know by reputation", not personally. So Emma didn't know the family, but she supossed that they were "coarse and unpolished"!