Ack, I forgot that she's also spelled 'Miao Shan'. The story here is a combination of all the versions of her I've read, plus my own personal experiences with her as Kwan Yin. I should also note that I'll write one part, then have a 'cliffhanger' ending before writing the rest. (More so that I can be sure not to create a ten page post than trying to get people concerned, though, as I imagine they can guess that the story doesn't end there!)
Miao Shan was the youngest daughter of a rich couple. From her kind mother, she inherited her gentleness. From her fierce father, she inherited her tendancy toward stubborness. As a girl, she loved plants and wild animals, and -most especially- she loved people and saw and celebrated the good in everyone.
Around eight or ten, Miao Shan was wandering by herself when she came across a hermit woman. On the outside, this woman was incredibly ugly, but Miao Shan saw the woman's inner beauty and sat beside the old woman, basking in her glow. Miao Shan decided that she would become a hermit.
When she told her parents, they joked that she would soon decide she would want to marry, instead. As Miao Shan grew older, though, it became uncomfortably obvious to the family that she was, indeed, planning to pursue a holy life.
Her father grew especially angry. There are different versions of why this was. Some say that he was greedy man, and wanted what money and honor that marrying off his daughter would bring. Others say that he simply loved his daughter, and was worried that the was heading down the worst path possible. Because he wanted to scare her from a holy life, all the tales tell, he sent her to a convent, thinking that the stay would most certainly change her mind.
It had the opposite effect. Young Miao Shan loved the nuns and the convent. She loved meditating and the revalations it would bring. As she meditated further, her thoughts became more profound and she became even more aware of the beauty in everyone.
Her father, seeing this, instructed the other nuns to give her extra duties and to treat the girl poorly, hoping that this would convince Miao Shan to turn from the holy life. Instead of turning her from the life, the extra chores gave her more time to meditate, and the coldness from the other nuns helped her to learn to love others, even when they are not acting in accordance with their Highest Self.
When the nuns saw this, they told their father that they could not continue trying to be cruel to the girl. Their religion and their own good natures forbid it. In a fit of anger at his daughter, the father ordered his vassals to kill her.
The vassals, or soldiers, took the girl into the forest. They loved and respected Miao Shan, but were frightened of her father. As they travelled, Miao Shan gently let them know that she was aware that they had been told to kill her. She promised that she would not struggle or try to run, and that she had already forgiven the two for what they were going to do.
The soldiers wept, but their fear still led them to a clearing in the forest, where Miao Shan politely knelt, and wondered what her next life would be like as the two raised their swords.