Frances Hodgson Burnett’s A Little Princess (1905) focuses on the often neglected daughter’s role and how she contributes to British imperial culture in the late nineteenth to early twentieth century. While various scholars have presented postcolonial critiques of A Little Princess, not much critical attention has been paid to the figure of the memsahib and how it influences the identity of the protagonist, Sara Crewe. When Ram Dass confers on Sara the position of “Missee Sahib,” or a little version of the memsahib, he attaches to the eleven-year-old girl a complicated position of gendered colonial authority. A tension emerges, then, between the historically troubling character of the memsahib and the fantastical character of the fairy-tale-like princess. This paper argues that this tension disappears by the novel’s conclusion because Sara as the little memsahib is reshaped into a fantastical and benevolent princess figure to govern the ideal domestic empire. We begin by examining the genre of children’s literature and how the colony serves as a device to construct the more fantastical plot elements. We proceed to consider the crucial role of the servants in making Sara into an authority figure, and finally, we problematize the novel’s happy ending in which the issues of race, class, and empire are foreclosed.