The answer is:
The Girl Who Circumnavigated Fairyland in a Ship of Her Own Making by Catherynne M. Valente.
It was originally published serialized online and paid for by donation. There was
a discussion on MobileRead when she took the book offline. It won a Nebula Award (The Andre Norton Award) and was the first on-line serialized book to win such an award.
I discovered her work this year. I had seen
The Orphan's Tales: In the Night Garden somewhere and figured it was a sure bet for someone that loves folklore and folktales. I was not disappointed. While the Orphan's Tales are definitely more grown up, there is a lot to love in her writing in Fairyland for adults and the diction is certainly not the usual young adult faire in which it is classified. I will be reading more by this author in the future.
I'll leave the floor open to anyone that wants to puzzle us with the next book.