In my Fairy Kingdom, the Queen owns the literally central library where the originals of all books in her realm are stored. All towns and villages have their own smaller libraries with a selection of copy books and every so often this selection is changed by prior arrangement with the Palace. Eileen's alternative version of Kingdom history is never allowed out of the Palace and those wanting to read it there have to give their personal details to the Librarian who passes these on to the Queen and her Council. Surprise, surprise, this puts people off reading them and Eileen is less than happy about it. Censorship officially doesn't exist in the Queen's realm but it can turn up in disguise!
Reading is compulsory but it is also compulsory to make it fun! The local libraries play a huge role in this with special events and they are often used as a venue for re-enacting the fairy stories. There is absolutely no danger of libraries being closed here. If ever there was proof I write fantasy, that is it! (Shouldn't be the case but there you go).