Who is the narrator, can she or he read minds, and, more importantly, can we trust her or him?
Third Person (Limited Omniscient)
The entirety of Princess Academy is told from a third-person point of view, meaning by an outside narrator. This narrator tells us things as they're happening to the girls of Mount Eskel as they go through the princess academy and fight it out for the title of academy princess.
However, this third-person narrator also follows one particular character very closely: Miri. Because of this, we only get to see into Miri's thoughts—everyone else's brain is off-limits. For example, we see how she is feeling when she is told that she must leave her family to go to the princess academy and how confused she is by her feelings for Peder. As we understand her thoughts, everything that unfolds is understood through the lens of Miri's experience.