That particular set was collected by Cecil Sharp from Mrs Priscilla Cooper at Stafford Common, Devonshire, 2nd September 1907. She sang "royals", as did another singer (this time in London) from whom Sharp got a version. It seems to have been substituted quite commonly for "loyal" in this particular song; perhaps (or perhaps not) by analogy with other popular songs where a stranger turns out to be disguised aristocracy.

The song circulated quite widely on 19th century broadsides (where the word is "loyal"); some of which can be seen at Bodleian Library Broadside Ballads:

American Stranger (list).