So this kingdom is smack in the middle of a monster-infested forest. Normally humans wouldn't dare to live there, except that there's this living magic sword called Grandaria which the princess uses to keep the monsters at bay. Every so often the woman in the black dress, who's supposedly some kind of priestess, takes the sword away to perform some kind of ritual to purify it, which is why the princess doesn't have the sword when the demons start showing up.
Except that the priestess isn't actually a priestess at all, but an immortal magician who made a pact with the demons long ago in exchange for eternal life and power. The magician created the sword as a lure so that humans would come live in the forest, thinking it would protect them. After the kingdom's been built up again, she takes the sword away and disables its power, and the demons pop up and "harvest" the women for mana. Then the cycle repeats. The magician tells the princess this while everybody else is getting eaten, although it's only spelled out in the little novel portion. In the end the princess submits, since the magician (falsely) told her that everybody else would go free if she did.
In the end it turns out that the apparently-sentient sword was in love with the princess and has finally had enough of playing along, so it powers up again and flies off. The magician tries to restrain it and gets her limbs cut off for her trouble (but doesn't die, because she's immortal). Then, because the sword becoming active violated the terms of her pact with the demons, she gets eaten along with everyone else.
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