This started out as a fun little time-killer. I ended up scrambling to find fantasy words for some of these letters and I left out quite a few. If you have different ideas, please add them in the comments!
Antagonist – Evil wizard, dark Lord, sorcerer, sorceress, demon, dragon
Book – The book of spells, book of prophecy, similar: scroll.
Creed – An oath, a motto, words and rules accepted and lived by, separate oaths belonging to hero and villain.
Dungeon – Literal dungeon, any prison, cell, place of punishment or torture.
Eye – The all-seeing eye, the evil eye, ex. Eye of Soren
Fae – All or any manner of spirit folk including fairies, elves, goblins, dwarves, satyrs, pixies, nymphs, gnomes, brownies…
God and Goddess – Most every fantasy tale includes one or more deities that are worshipped, beloved, feared, or hated.
Halfsies – Those of mixed blood, usually human combined with a fae.
Illumination – The light that shines on or illuminates everything all at once, shines forth from fingers and eyes, shoots from swords or wands…
Jewels – Usually cursed or charmed, jewels are often a main part of the story.
Key – There is always a key that unlocks something for good or evil. Sometimes the key is an actual key, other times it may be in another form, such as a jewel or a person.
Lady of _________ (the lake, the mountain, the oak, the moon…).
Magic – The most obvious element. Good or bad, what is a fantasy novel without magic? If there is no magic, there is no fantasy.
Nature – Forests, trees, animals, wind and rain… The natural world rarely goes unfeatured.
0mens – For good or for evil, there are omens as signs or warnings. Good or bad omens are often the catalyst for the plot.
Protagonist – The hero or heroes of the story. Those who are challenged to overcome a problem or situation that puts entire localities and peoples in harm’s way. The protagonist fights the antagonist.
Quest – What the heroes go on in order to find “it” and/or beat the villains.
Royalty – Kings, queens, princes, princesses, lords, ladies, dukes, and duchesses. Choose one or two or more…
Swords – They may be magical or not, but they are around and they will be used on someone!
Talisman – For protection, good luck, and a bit of spellcasting.
Underclass – The peasants, the slaves, and the poor.
Vale – There are vales all over in epic fantasy tales. There are hills, too, but H is already taken.
Water – The lake, the ocean, the river, the pool, the moat, or the fountain. These may or may not be mystical, but they usually are.
Xenophobes – Those that don’t like you because you are from a particular country or race. They might not be called xenophobes, but they are there.
LYre – Usually played by a bard, who also sings and tells tales.
Zion (or the fantasy equivalent) – That fabulous paradise that exists at the end of the expedition.