why does maddie stand by and not do anything? how is she different from peggy? was peggys friendship important to maddie? why?

Maddie stands by and does not do anything because she did not have the courage to speak against Peggy as she was her best friend. Maddie is different from Peggy because she did not make fun of Wanda. Moreover, Peggy's friendship was important to Maddie because she was the best-liked girl in the whole class and she was afraid to be the next target of everyone's fun.

The line, "She was Peggy's best friend, and Peggy was the best-liked girl in the whole room. Peggy could not possibly do anything that was really wrong, she thought." shows that their friendship was important to Maddie.