You know, I really like those characters. It's actually pretty rare that I care so instantly for someone but they both just feel like honestly nice persons. Even though they have their little flaws, they are still both relatable and interesting.
I liked the friendly banter and was really worried about Fenn (I still am, somewhat) when he collapsed. The backstory is interesting and makes sense. I'm looking forward to the next chapter.

That's an intreaguing start. I think it's very clever to recount the backstory this way. The style is really nice and fitting for an old tale. It contains enough details to make it understandable and yet remains vague enough to pique my curiousity. Well done!

Your heroine seems entirely too naive for someone who grew up in a court; especially given her equivocal, even precarious, position. She didn't even check to see if the sword was actually in the bundle. I don't insist that every princess be as wary and as talented as the first Elizabeth, but why is she so uninformed and trusting? Plots usually center on a court, and she's part of the court, even if she's only a bastard.
Also, check images of satchels. It's hard to imagine a sword in a standard satchel. A less precise and limiting name might be: carrying case, which is nicely general.

Fixing mistakes you know about is simple: go to manage documents, correct the MS, then use the 'replace content' function. The usual order is write, edit, then post, but certainly you can edit your story as soon as you're aware of a goof.

'Thus, the slightly ramshackle nature of the palace was not difficult to navigate...' Thus? A strange conjunction. How is the easy navigation a result or conclusion? What do you intend the meaning of this sentence to be? 'Thus' doesn't seem to fit at all.

'...four elves ...walked on either side of a single Elf...' Ambiguous: How many total elves? Four on each side? Two front and two back? -If it's not vital, try a careful generality: A single Elf surrounded by four (or eight or however many) guards...

I'd change the councilor's name: 'Thrice bowed...' It's either awkward or silly.

'Mysterious dark haired lady... never know...' Not likely. Imagine one of the British princes fooling around. Would that stay quiet? Again, not likely. Conflicting stories, certainly, but not a blank.

She had never heard any story or explanation for why her father had chosen Allary as her name, but she did not know that it was Elvish in origin-and another weird conjunction: 'but'. Why 'but'? What in the first part of the sentence is in contrast to the second part? '...never heard a story ... BUT she did know her name wasn't elvish? OR '...never heard a story ... AND was surprised to learn...' Conjunctions seem to get tossed about randomly here, with some resulting confusion. Each one has a purpose beyond just joining two parts of a sentence. Decide what you mean, and pick a conjunction that fits, even if it means checking a dictionary definition.

"My tutor left early. Again." She said, pushing herself upright and closing the book with a loud thump.
"I feel like we haven't done this in ages," Allary said, pulling on some protective gear.
"I need this, though. It's been a while since I've actually felt in control of anything," He glanced up at her, "Despite the fact that I'm technically in control of all of Orcad."
"So what's this secret that's to be my prize for beating you?" She asked.
"You can," He said, - You have a variety of ways for dialogue tag punctuation. Unfortunately, only one - 1 - of the above examples is correct. Check 'Absolute Write Water Cooler: Grammar and Syntax: Dialogue Punctuation and Capitalization' if you want to know which one. All the others are wrong, either in their punctuation or their capitalization and seriously detract from the smoothness of the text.
The back story is handled well, with only a little info-dump-ness in the sickbed scene. The foreshadowing of why A will need to speak elvish, on the other hand, is excellent.
The next to last sentence is weird: 'They spent the rest of the evening swords and famous...' -the sense of the sentence seems to be they spent the evening DISCUSSING or ARGUING, but no verb is supplied.

Even more hints?! xD I like how you have Allary actually talk to Orlon during the trip. Good for the peace treaty between the two nations.

Ahhh...perhaps a hint on her mother then? ;D

interesting. Do continue please. xD