The "royal we" form is mostly found today in fairy tales, medieval fiction, and fantasy literature such as "The Lord of the Rings" and "Game of Thrones." In centuries past, it was common for royalty and religious leaders to be referred to (and to refer to themselves) in the plural tense, based upon the conceit that, in referring to themselves, they were referring to "God and I." German uses the Latin term Pluralis Majestatis to denote the "royal we."
This obsolete form of personal pronoun does not present any grammatical problems in English, since it is commonly either rendered in modern English as "we" or "you" (in the plural sense), or in archaic English as thee, thou, thine etc., although these forms are also merely archaic and not necessarily reflecting the "royal we" form.
In German, however, the use of "royal we" can be initially perplexing. For the nominative second person singular pronoun, instead of the modern Sie (you), the "royal we" form uses Ihr, with the Ihr always capitalized. Initially this may appear to be the same as the plural pronoun ihr, but is actually addressed to a single person:
Majestät, Ihr seid die Schönste hier.
Majesty, you are the most beautiful here.
Caption 86, Märchen, Sagenhaft: Schneewittchen
In standard German, the above sentence would have been written: Sie sind die Schönste hier. The "royal we" case Ihr conjugates the verb the same as the plural nominative second person pronoun ihr.
The accusative second person singular pronoun Sie (you), in a similar fashion, uses for the "royal we" form of the capitalized version of the accusative second person plural Euch:
Ich befreie Euch von dem Versprechen, Prinzessin!
I free you from the promise, princess!
Caption 58, Märchen, Sagenhaft: Hans, mein Igel
In standard German, the above sentence would have been written: Ich befreie Sie von dem Versprechen.
To further familiarize yourself with the use of the "royal we," go through the videos (listed on the right hand side of this lesson) on Yabla German that include extensive examples of Pluralis Majestatis.