A True Princess by Diane Zahler

Twelve-year-old Lilia is not a very good servant. In fact, she's terrible! She daydreams, she breaks dishes, and her cooking is awful. Still, she hardly deserves to be sold off to the mean-spirited miller and his family. Refusing to accept that dreadful fate, she decides to flee. With her best friend, Kai, and his sister, Karina, beside her, Lilia heads north to find the family she's never known. But danger awaits. . . .

As their quest leads the threesome through the mysterious and sinister Bitra Forest, they suddenly realize they are lost in the elves' domain. To Lilia's horror, Kai falls under an enchantment cast by the Elf King's beautiful daughter. The only way for Lilia to break the spell and save Kai is to find a jewel of ancient power that lies somewhere in the North Kingdoms. Yet the jewel will not be easy to find. The castle where it is hidden has been overrun with princess hopefuls trying to pass a magical test that will determine the prince's new bride. Lilia has only a few days to search every inch of the castle and find the jewel—or Kai will be lost to her forever.