This is a film scene which has stuck with me for over 20 years since seeing it as a child. Unfortunately, due to the long time since seeing it - the exact details are hard to recall perfectly.
The scene that has stuck in my mind is:
There is a big royal party of some kind, lots of fancy dress, but all the colours are washed out and dusty. It had a distinctly sinister vibe.
There are stone statues of "dwarfs"/created from small-people.
The guests bowl balls at them as if they are bowling pins, when they are hit - they distinctly explode in grey/stone dust. From what I remember, it makes a point of showing these statues being destroyed, while everybody is laughing/having fun.
With these possible details which unfortunately, may be misremembered as it's been so long:
I think the main character (or one of them) was also a dwarf/small-person. Hence how much more sinister it all was.
The statues I think were originally living people, turned to stone. But it could be that they were actually just statues.
I think the main character wanted to undo some spell to turn them back to human form.
I think the antagonist may have been a female witch of some kind.
When I saw it, it was on British TV at some point in the mid-late 90s (or very early 2000s at latest). But I'm confident it was created in the 80s or 90s at latest, given what I remember of its production quality. It was a live action film.
Although I remember it being distinctly disturbing as a child. I'm not convinced it wasn't aimed at children. It was no more disturbing than "The Witches" - and was vaguely similar in terms of the film quality (although this may have been my TV).