  The narrow emission line spectra of active galactic nuclei are not accurately
described by simple photoionization models of single clouds. Recent Hubble
Space Telescope images of Seyfert 2 galaxies show that these objects are rich
with ionization cones, knots, filaments, and strands of ionized gas. Here we
extend to the narrow line region the ``locally optimally emitting cloud'' (LOC)
model, in which the observed spectra are predominantly determined by powerful
selection effects. We present a large grid of photoionization models covering a
wide range of physical conditions and show the optimal conditions for producing
many of the strongest emission lines. We show that the integrated narrow line
spectrum can be predicted by an integration of an ensemble of clouds, and we
present these results in the form of diagnostic line ratio diagrams making
comparisons with observations. We also predict key diagnostic line ratios as a
function of distance from the ionizing source, and compare these to
observations. The predicted radial dependence of the [O III]/[O II] ratio may
be matched to the observed one in NGC4151, if the narrow line clouds see a more
intense continuum than we see. The LOC scenario when coupled with a simple
Keplerian gravitational velocity field will quite naturally predict the
observed line width versus critical density relationship. The influence of dust
within the ionized portion of the clouds is discussed and we show that the more
neutral gas is likely to be dusty, although a high ionization dust-free region
is most likely present too. This argues for a variety of NLR cloud origins.
