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Two different headlines below and I would like to know which is the correct use of the word here:

  1. "Royalties draw line in the sand on Islam"

  2. "Royals draw line in the sand on Islam"

Below is the link to the actual news headline and also a Facebook post that triggered my curiosity. Thank you in advance.

source: https://www.malaysiakini.com/news/398560

source: https://www.facebook.com/photo.php?fbid=10211989548948061&set=a.2262622319047.2124240.1053139405&type=3&theater

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    #2 Is correct. Royals are people of royal birth or status. Royalty refers to such people for example "Royalty attended the society wedding" or "Several royals attended the society wedding". Royalty also means payment for the use of an original work. Royalties, however, mean only payments for the use of original work. – ab2 Oct 22 '17 at 1:36
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    Fabio, no matter what you have seen in a dictionary and regardless of the examples you just cited, "royalties" in the plural is used to mean one thing only, payment for the use of an original work. In your examples, the singular "royalty" would be correct, even when describing many people (much like the singular furniture can describe every piece of furniture in a house.) – Steven Littman Oct 22 '17 at 11:38
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    @ab2 how about these examples, here's a few just by googling: "Personal attacks on royalties (including the Queen Mother) are conducted with a venom that suggests underlying frivolity" source: theguardian.com/observer/comment/story/0,,348626,00.html "All the family, foreign Royalties, special Ambassadors & Envoys were invited" source: theguardian.com/uk/2012/feb/23/queen-victoria-faberge-notebook – Fabio Lanzoni Oct 22 '17 at 13:18
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    "What other ceremonial could have brought together a vast concourse of this kind with its admixture of foreign royalties" source: theguardian.com/news/1953/jun/03/mainsection.fromthearchive – Fabio Lanzoni Oct 22 '17 at 13:18
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    @ab2 also the NYT obituary should have been proof read by their editors before publishing and it had this to say "The Dowager Empress was one of the richest royalties in Europe, being worth several million dollars." – Fabio Lanzoni Oct 22 '17 at 13:23
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Much to my surprise, I found examples of royalties used to refer to royal personages in the Oxford English Dictionary. Non-subscribers will hit a pay wall on this link, and the entire entry for royalty and royalties is too long to quote, but here are all the examples of royalties meaning royal personages:

a1592 R. Greene Frier Bacon (1594) sig. F I came to haue your royalties to dine With Frier Bacon heere in Brazennose

1761 H. Walpole Let. 25 Sept. (1857) III. 441 The late Royalties went to the Haymarket, when it was the fashion to frequent the other opera in Lincoln's-inn-fields.

1813 Lady Burghersh Lett. (1893) 51 They are just like the Windsor Royalties, for they literally know every thing.

1885 H. R. Haggard King Solomon's Mines xvi. 269 This long line of departed royalties (there were twenty-seven of them).

1902 W. B. Yeats Let. 13 June (1994) III. 207 I will neither mix myself up with English royalties nor ‘English Soldiers & Sailors’ with whom the Princess as you say, ‘is so much interested.’

1952 G. Vidal Judgm. of Paris i. 15 He had felt like a royalty when the man from the Excelsior picked him up.

1998 E. Denby Grand Hotels 213/2 European royalties and statesmen from America were hotel guests at the time of the funeral of Emperor Meiji in 1912

The OED (link above) also gives other meanings of royalties; the one of most interest here is (I quote only three examples):

d. In pl. Emblems or insignia of sovereignty. Also fig. Cf. regalia n.1 2a. Obs.

1607 R. C. tr. H. Estienne World of Wonders 122 This iolly Iupiter clothed in his royalties.

1769 O. Goldsmith Rom. Hist. I. 39 He assumed a crown of gold..and robes of purple. It was perhaps the splendor of these royalties that first raised the envy of the late king's sons.

1863 H. E. Manning Serm. vii. 266 The Vicar of Christ was clothed with his Royalties

Thus the OP is correct that both sentences in his question are correct. As to which sounds better, to a native English speaker in the US, royals not only sounds better, but royalties sounds incorrect. A speaker of British English might differ, given the quotes supplied by the OP from The Guardian.

It remains now only for someone to find royalties used in People Magazine for me to unconditionally raise the white flag. Well, maybe not. People is not the best example of English usage.

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