I don't remember if this is a short story or novel. It could be either, but I'm more inclined to think it's a short story. It's been over 20 years since I read it.
The story drew a clear distinction between things that were REAL and everything else. The word REAL was emphasied in some way. It was either all caps, or at least the first letter was always capitalize. Only a few things in the story were identified as being REAL: a stone forming the seat of the throne, her advisor's wooden staff, her father (a Basilisk), and (at the end of the story) a Dragon.
I'm trying to remember a quote from the story that her father used to describe her advisor. It was something along the lines of: "name is a adjective man, and cannot be trusted." The adjective might have been "true" or something along those lines. The idea was that the advisor was more inclined to do the right thing (according to his perspective) than he was to be loyal to her or any other individual.
Do anyone remember the story or the quote?