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I only know one little Charlotte. Everyone calls her Charlie, but that's what she's introduced as by her parents. If her parents called her Charlotte instead of Charlie, I (and most people I assume) would just use Charlotte.
Not necessarily, My brother's name is 'Gareth' but he absolutely hated to be called that, and would only answer to Gary. My parents didn't have much say in the matter
4 Charlottes in my friend group here, all shortened to Charley/Charlie, or at least, that's how they were introduced to me.
Tends to be the parents who choose whether or not to shorten the name, then maybe that switches over to the child when they become a teenager. Most people will just call someone by the name they are told rather than shorten or change it on the spot.