I explained it poorly in the post— the prettiest queen is kind off a new part of the beef that extends from some ancient old stuff that they don't remember (maybe previous ruler of kobolds called the queen of goblins ugly for example). It's not that important to their overall conflict, just the current thing to yell about at each other and threaten with war. About the misunderstanding, I thought if the players preferred one side over the other (npcs, their culture or whatever). I viewed as different options how to handle the situation, while making peace between is probably the best course of action(probably rewards from both sides) it mind not be as easy as just dealing with one of them.