Kovu is out with his and Nala's daughter. She doesn't realize Kovu's her father, just the king. Nala and Kovu devised a plan as soon as they heard that the king Thelugi of the Mountainlands was arriving with his son to improve relations with Kovu's pride.
Kovu and Nala were already on thin ice. The young lioness came from Nala, but looked rather like Kovu. Nala gracefully shrugged it off, assuming that it must come from Scar's genetics - not all a lie, after all. However, when distinct traits that could only be Kovu's in the pride would come through when the girl gave birth to her own cubs, the truth would come out.
Then they heard of Thelugi's son, Kalte(Kahltay). When they heard he was coming alongside his father, they knew what to do - in order to improve relations between the prides, they had their daughter betrothed to Kalte as the prince's lioness. When Kovu told his unknowing daughter this as she met Kalte, and thought of him as a good playmate, both loathed the arrangement.