Two-book bundle by author Kelly Barnhill.  Recommended for ages 8-12.

The Mostly True Story of Jack, Amazon Best Books of the Month, August 2011

Description:

Enter a world where magic bubbles just below the surface. . . .
When Jack is sent to Hazelwood, Iowa, to live with his strange aunt and uncle, he expects a summer of boredom. Little does he know that the people of Hazelwood have been waiting for him for quite a long time.
When he arrives, three astonishing things happen: First, he makes friends -- not imaginary friends but actual friends. Second, he is beaten up by the town bully; the bullies at home always ignored him. Third, the richest man in town begins to plot Jack's imminent, and hopefully painful, demise. It's up to Jack to figure out why suddenly everyone cares so much about him. Back home he was practically, well, invisible.
The Mostly True Story of Jack is an eerie tale of magic, friendship, and sacrifice. It's about things broken and things put back together. Above all, it's about finding a place to belong.

Iron Hearted Violet, a 2012 Andre Norton Award Finalist and a Parents' Choice Gold Award Winner

Description:

The end of their world begins with a story. This one.
In most fairy tales, princesses are beautiful, dragons are terrifying, and stories are harmless. This isn't most fairy tales.
Princess Violet is plain, reckless, and quite possibly too clever for her own good. Particularly when it comes to telling stories. One day she and her best friend, Demetrius, stumble upon a hidden room and find a peculiar book. A forbidden book. It tells a story of an evil being--called the Nybbas--imprisoned in their world. The story cannot be true--not really. But then the whispers start. Violet and Demetrius, along with an ancient, scarred dragon, may hold the key to the Nybbas's triumph...or its demise. It all depends on how they tell the story. After all, stories make their own rules.
Iron Hearted Violet is a story of a princess unlike any other. It is a story of the last dragon in existence, deathly afraid of its own reflection. Above all, it is a story about the power of stories, our belief in them, and how one enchanted tale changed the course of an entire kingdom.