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The girl is at court with her beautiful social butterfly sister. The beautiful sister messes up but the Queen blames the influence of the other sister because she doesn't want to lose the beautiful sister. The Queen banishes the girl to a remote castle where she is allowed no contact with anyone outside the castle, especially not her sister. She arrives after a little girl has been stolen by a race of creatures that lives underground. The little girl's brother (or cousin) is exchanged for the girl to be part of some ceremony that is necessary for the underground race's survival. The girl from court gets caught watching the exchange and is taken underground. She ends up foiling all their plans and the race is basically destroyed by underground flooding. I remember a line about "un-horsing the rider" where she talks the drugged brother going to his doom into getting off his horse, which breaks some sort of spell.

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This story has been identified in another question, and is The Perilous Gard, by Elizabeth Marie Pope.

The Perilous Gard takes place in England during the 1550s. The lead character, Kate Sutton, is a lady-in-waiting to Princess Elizabeth (the later Queen Elizabeth I of England). Her sister, Alicia, inadvertently gets her exiled to a castle named Elvenwood Hall, also known as the Perilous Gard, where she finds that the daughter of Sir Geoffrey Heron, the master of the hall, vanished under mysterious circumstances that implicate his brother, Christopher Heron. Kate soon discovers that, although the seeming death of little Cecily was an accident, Christopher is still so overwhelmed with grief that he has exiled himself from castle life. When Kate learns of the local villagers' fears that the "Fairy Folk" will kidnap their children, she guesses that Cecily might not be dead after all. She tells Christopher of her suspicions, and he, unbeknownst to Kate, comes up with a desperate plan to save Cecily. Meanwhile, Kate stumbles into the underground world of the Fairy Folk, who intend to use Christopher's desperation to their own advantage. The Fairy Folk are ruled by the Lady in Green, who believes that only a sacrifice can help her people hold their own against the advancing modern world.

Kate detests the Lady in Green at first, but the two of them have much in common. Both are strong-willed, highly independent, and capable of enormous self-discipline. Kate's refusal to be drugged or manipulated in other ways soon gains her a measure of respect among the Fairy Folk. Little by little she gains knowledge of their underground kingdom, while her view of the Lady in Green gradually changes. Kate begins to understand and even to respect the Lady in Green. In the end, however, Kate chooses to leave the Fairy Folk in order to save Christopher, destroying the fairy kingdom in the process. Christopher then takes Cecily to London to live with his sister Jennifer. When Christopher returns he proposes to Kate, and she accepts. Kate is granted freedom when Queen Elizabeth I ascends the throne.

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