As she says rather forcibly at one point, "I will never ever turn my back on people who need me!" She cares deeply for not just her friends, but also for everyone who is unable to stand up for themselves, as can be witnessed on at least one occasion in the episode The Painted Lady. She is strong and independent, but also has a softer side. And she continues to grow even throughout the season, especially when she finds herself coming face-to-face with her mother's killer. Katara we meet in the very first episode, the last waterbender of her tribe, but by the third season she has become a full-fledged waterbending master.
Katara and Toph are the two lead female characters on Team Avatar, and they complement the two male characters, Aang and Sokka, well. Some are good, some are bad, and some are in-between, conflicted, like one might expect in real life. While most action-adventure cartoons will have one or maybe two female characters, this has almost an equal number compared to the boys, and here they all real characters, not just stand-ins there to look pretty.
I think the featurette on the women of Avatar: The Last Airbender was a fantastic idea, as the sheer number of female characters and how they are portrayed is definitely one of the things that makes this series stand apart from the rest. The entire third season of Avatar: The Last Airbender was released on DVD earlier this year as separate, individual DVDs, but now they have all come together in peace and harmony as a box set, complete with an extra bonus disc containing a featurette about the women of Avatar: The Last Airbender, a pencil test animation, and footage from the San Diego Comic-Con.