So there’s this princess and her handmaiden who are sent to the next realm over (without any retinue or guards, because why not) so that the princess can marry the prince. The princess has a talking horse named Falada (why can he talk? it isn’t clear) and a magic handkerchief her mother gave her for protection (instead of guards; again, why not).
During the course of the journey, the handmaiden decides she’s tired of being a servant and can definitely be a better royal than the princess, so she changes clothes with the princess, gets on the horse, and starts bossing the princess around. And the princess goes along with this because… why not. Also, she loses the magic handkerchief so it no longer protects her.
So they get to the other realm and the fake!princess orders that the fake!handmaiden be cast out for reasons and has the talking horse killed so that he can’t tell the truth of the matter. Then, for reasons, the talking horse’s head is affixed to an overhang. Why? Why not.
Anyway, the fake!handmaiden finds work as a goose girl, and her duties take her under the overhang with the talking horse head which still talks even though the horse is dead. For reasons.
Time passes. The fake!princess and the prince aren’t married yet, but somehow the fake!handmaiden gets an audience with the king, tells him everything, and presents the dead talking horse as evidence.
So the fake!princess is punished, the fake!handmaiden marries the prince, and the dead talking horse is finally buried. And everyone (except the fake!princess and the dead talking horse) live happily ever after.