Indirect characterization is the norm and is where the reader interprets the character's words and actions. Direct characterization is when the reader is told rather than shown what the character is like. So when Pip tells Joe and the reader that Estella is 'dreadfully proud' this is direct characterization; Estella's arrogance has deeply impressed Pip. 

Another example is when Pip tells the reader directly he  had a 'dread of not being understood'. We don't have to work this out from his subsequent actions. It is perhaps the most striking example of direct characterization in the chapter because Pip tells us that this dread is true of young people in general. It is part of Dickens' concern for the treatment of choldren.