Summary: A king is worshiped by everyone around him. For example, if he laughed, his royal court laughed or if he cried his royal court cried. Because of this the King grew bored and went in search of the truth. Was he really powerful and would people still mimic him if he took of his royal garments? The King then disguises himself and found that people laugh at him and not with him... he even gets kicked. In searching for truth, he finds a young woman who has lost her parents and bridegroom due to high tax debts commanded by the king. He consoles her and is seized by love for her, and she for him. She becomes Queen and he finds a new realm, "The realm of Love". The tale states it is a "fairy tale ream in which even fish mate in the air."
This can be called a fairytale mainly because of the romance. There are other fairy tale elements as well, like "Once upon a time", the establishment of a king in general, and disguise. At the heart of the fairy tale element is romance. I say this because like so many other stories we know, the love happens like magic. Unlike Disney film adaptions that build up to the eventual love scene, most written fairy tales do not mention a possible romantic spark until you read to a certain page number and conveniently the maiden stumbles across a handsome young man. One paragraph (or less) and they are married. The truth of life that the king went on a search for is somehow love. And just like that she becomes Queen. Sounds like a fairytale to me.