When Algernon proposes marriage to Cecily, she surprises him by saying that they have already been engaged for months!
She explains that she has been fantasizing about their relationship and has even written about it in her diary. She tells Algernon:
"We have been engaged for the last three months."
Cecily goes on to say that she had imagined their entire romance—including their engagement, a dramatic breakup, and a reconciliation—all before actually meeting him. She also admits that she loves him primarily because she believes his name is Ernest, just like Gwendolen does with Jack.
This moment is both hilarious and absurd, as Algernon realizes that Cecily’s obsession with the name "Ernest" means he must now get christened as "Ernest" to keep up the act, mirroring Jack’s own predicament.