TL;DR
In the novel, Xiao Yao and Cang Xuan are blood-related first cousins through Xiao Yao's mother and Cang Xuan's father, who are respectively the daughter and son of the Yellow Emperor (in the drama, the King of Xiyan) and his official empress, Leizhu (in the drama, the Queen of Xiyan, Xiling Xie). After Cang Xuan's parents died, Xiao Yao's mother looked after Cang Xuan (her nephew) as if he were her own child. Cang Xuan and Xiao Yao lived together for eight years after Xiao Yao's mother's divorce, and they referred to each other as 哥哥 (Ge Ge / older brother) and 妹妹 (Mei Mei / younger sister) even before Cang Xuan's parents died.
In the drama, some details have been changed (in some cases at the last minute, in redubbing) to make it seem like Xiao Yao and Cang Xuan are perhaps still blood relatives, but, if so, only distant ones (with Xiao Yao's mother being the Queen of Xiyan's disciple and relative, but not her biological daughter) and not blood-related first cousins.
In particular, they have made changes so that Xiao Yao's mother (Xiling Heng / Ah Heng) comes from the same clan as Cang Xuan's grandmother, the Queen of Xiyan (Xiling Xie / Lady Xiezu), so the two women are likely blood-related to some degree, but Ah Heng is Xiling Xie's disciple rather than her biological daughter. We can infer that Ah Heng was probably something like Xiling Xie's niece, in which case, CX and XY's parents would be first counsins and CX and XY would be second cousins.
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Feel free to use this thread to correct any of the items below if I've gotten anything wrong, or to suggest any details that should be added.
All references to "the novel" mean Koala's english translation of the 2013 version of the novel, unless specified otherwise. Timestamps marked with "VK" are aligned with the timing of the version of the drama available through Viki. Timestamps marked with "YT" are aligned with the timing of the version of the drama available on Youtube.
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In the Novel - Summary
Xiao Yao and Cang Xuan are blood-related first cousins.
Xiao Yao's mother's official name was Xuan Yuan Ba. She went by Xiling Ba (taking her mother's family name) to wander the wilderness freely. Her nickname was Ah Heng. She was the only daughter of the Yellow Emperor of Xuan Yuan and his official Empress, Xiling Lei Zhu. Which made her the princess of Xuan Yuan.
In addition to her daughter, Empress Lei Zhu had three sons: Qing Yang, Yun Zhe, and Chang Yi. Ah Heng referred to Qing Yang as her Eldest Brother, to Yun Zhe as her Second Brother, and to Chang Yi as her Fourth Brother. Xuan Yuan Chang Yi was Cang Xuan's father. Making Ah Heng Cang Xuan's aunt, and making Xiao Yao and Cang Xuan first cousins. Xiao Yao refers to Chang Yi as "Fourth Uncle" and to Chang Pu as "Fourth Aunt".
In addition to his official Empress, the Yellow Emperor had three consorts and his third wife (Tong Yu) was his favourite. Eldest Prince Qing Yang was suspected / accused of killing Third Prince Hui, who was Tong Yu's son. In retaliation, ninth Prince Yi Peng, also Tong Yu's son, contributed to Fourth Prince Chang Yi's death. To avenge her husband, Chang Pu wanted to kill Yi Peng but ended up killing his mother (Tong Yu) instead before committing suicide. To prevent Yi Peng from killing Cang Xuan to avenge Tong Yu, Ah Heng killed Yi Peng (her ninth brother and childhood friend).
Although the Yellow Emperor has many other sons (including Hui and Yi Peng), Xiao Yao and Cang Xuan are the only grandchildren of the Yellow Emperor and his official Empress.
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In the Drama - Summary
XY's mother is only referred to as Xiling Heng, A'Heng, and Princess General in the drama. Never as Xiyan Ba. And A'Heng says to CX that her last name is not Xiyan. Note that Xiling is the name of the Queen of Xiyan's clan. A'Heng says she was taught by CX's grandmother and refers to CX's grandmother as "shifu" rather than "mother". Shifu is also the term that CX uses to refer to the King of Haoling. CX and the Qingshui stone spirit refer to XY's mother as the Queen of Xiyan's disciple.
After divorcing the King of Haoling, XY's mother says that she is only a citizen of Xiyan. She was given the "Princess General" title by the King of Xiyan right before she left Zhaoyun Peak to lead Xiyan's army in their final battle with Chengrong's army (led by Chi Chen). All of this seems to suggest that XY's mother was not the biological daughter of the Queen of Xiyan (Xiling Xie) and the King of Xiyan.
Notably, XY refers to CX's parents as her aunt and uncle. CX refers to XY's mother as his aunt. And they both refer to the King and Queen of Xiyan as grandfather and grandmother (or grandma). But theoretically this could still happen even if XY's mother was a disciple to the Queen of Xiyan if she was accepted into the family as the equivalent of an adopted daughter.
XY also says that she and CX have a blood relation, and the King of Xiyan tells XY that she looks nothing like her own mother and instead her features strongly resemble the features of her grandmother (i.e., the Queen of Xiyan) back when the King of Xiyan first met her. These two details both make it seem like XY and CX must be blood relatives. The question is, to what degree?
It's possible that all the "disciple" references might just be smoke and mirrors to help the drama pass censorship restrictions without actually changing the fact that XY and CX are blood-related first cousins. Or perhaps they are more distantly related (e.g., perhaps they are second cousins or something similar). Close enought that it would still be possible for XY to strongly resemble Xiling Xie but distant enough to be deemed acceptable by the censors.
Note that it seems like the "disciple" references are re-dubbing changes that were made at the last minute, like the change that was made to XY and CX's childhood agreement (see the difference between the scene from the trailer and the scene from the drama below). So it's possible that the production team just wasn't able to fully and consistently make all the changes necessary to create a consistent back story for CX and XY's relationship.
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Names
Cang Xuan is "Xiyan Cang Xuan" in the drama, "Xuan Yuan Cang Xuan" in the 2019 version of the novel, and "Xuan Yuan Zhuan Xu" in the 2013 version of the novel.
Cang Xuan's father is "Xuan Yuan Chang Yi" in the novel and "Xiyan Zhongyi" in the drama.
Cang Xuan's mother is "Ruo Sui Chang Pu" in the novel and "Zhuoshan Chang Pu" in the drama. Chang Pu's family name is shown on her grave in episode 22.
Cang Xuan's grandmother is "Xiling Lei Zhu" in the novel and "Xiling Xie" in the drama. Feng Long refers to her as Lady Xiezu in episode 24 and Xing Yue refers to her the same way in episode 26.
XY's mother is "Princess Xuan Yuan Ba", "Xiling Ba", "Ah Heng" and the former Empress of Gao Xing in the novel. In the drama, she is "Xiling Heng", "A'Heng" and the former Queen of Haoling. By the King of Xiyan's decree, she is given the title "Princess General" before she leads the Xiyan army against General Chi Chen's forces.
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Timestamps from the Drama
Season 1, Episode 1 (VK 2:45):
The Queen of Xiyan is introduced as Xiling Xie.
Season 1, Episode 1 (VK 3:19 / 17:26 / 18:23 / 19:48):
XY refers to Xiling Xie as "阿婆" (Āpó / grandma).
Season 1, Episode 1 (VK 5:31 / 17:24 / 18:12 / 19:48):
CX refers to Xiling Xie as "奶奶" (Nǎinai / grandmother).
Season 1, Episode 1 (VK 6:39):
XY's mother is introduced as Xiling Heng.
Season 1, Episode 1 (YT 7:50):
CX refers to Xiyan Yipeng as "Ninth Uncle".
Season 1, Episode 1 (YT 8:14):
XY refers to CX's mother as "Auntie".
Season 1, Episode 1 (YT 8:31):
CX's mother is introduced as Chang Pu.
Season 1, Episode 1 (YT 8:56):
CX's mother (Chang Pu) confirms that her husband is Xiyan Zhongyi.
Season 1, Episode 1 (YT 9:02):
Xiyan Yipeng (a son of the King of Xiyan and one of his other wives, not Xiling Xie) refers to CX's mother (Chang Pu) as "sister-in-law" and to Xiyan Zhongyi as his brother.
Season 1, Episode 1 (YT 9:42):
CX's mother (Chang Pu) confirms that she is the head of the Ruoshui Clan.
Season 1, Episode 1 (YT 12:15):
CX's mother (Chang Pu) refers to XY's mother (Xiling Heng) as "little sister". Remember, in the novel Ah Heng was Chang Yi's little sister. Since Chang Pu was Chang Yi's wife, Ah Heng was also Chang Pu's little sister-in-law.
Season 1, Episode 1 (VK 16:02 / 16:29):
XY's mother (Xiling Heng) refers to Xiling Xie as "师傅" (Shīfù / master / teacher). She says she will look after CX and he will be her child from now on, just like XY.
Season 1, Episode 1 (YT 16:44):
Xiling Xie said she couldn't protect her son or her daughter-in-law (i.e., Zhongyi and Chang Pu).
Season 1, Episode 1 (VK 16:52 / 28:46):
XY's mother (Xiling Heng) refers to herself as a citizen of Xiyan, and no longer the Queen of Haoling.
Season 1, Episode 1 (VK 25:55):
XH: Cang Xuan, I am indeed a woman, but I am also a solider of Xiyan, just like your father. Although Xiyan is not my last name, I've been taught by your grandmother to protect this kingdom and its people.
...
CX: I'm also a Xiyan citizen...
Season 1, Episode 1 (VK 29:27)
By the King of Xiyan's decree, XY's mother (Xiling Heng) is made the Princess General who will lead Xiyan's army into battle.
Season 1, Episode 1 (VK 31:42):
King of Xiyan: Jade Mountain is isolated. It's a simple place. The Queen Mother has strong spiritual power and she [knew] your grandmother. She will certainly raise Xiao Yao wholeheartedly.
Season 1, Episode 1 (VK 41:48) - "The Queen of Xiyan on Zhaoyun Peak [had] three sons and one disciple."
Season 1, Episode 2 (YT 3:56)
QS Town Resident: The King of Haoling is the princess' father. The King of Xiyan is the princess' maternal grandfather. Neither emperor can find her?
Season 1, Episode 18 (VK 28:14):
CX: A'Nian, Xiao Yao's mother is the person I admire the most. She was the disciple of Xiling Xie, the Queen of Xiyan. She was also the bravest Princess General. Shifu married her with the grandest ceremony.
Season 1, Episode 19 (VK 9:44 / YT 10:46):
CX: Xiao Yao, if... I mean if one day, between me and Tushan Jing, you could only choose one, who would you choose?
XY: Cang Xuan, I've been a man for hundreds of years. Neither my mindset nor my actions are those of a little girl. Today's intimacy between lovers may turn into heartlessness tomorrow. Love arrives passionately and fades fleetingly. But the two of us share a blood relation, as well as a life.
Season 1, Episode 21 (VK 7:10):
King of Xiyan: You don't look like your mother, but your face and mouth really resemble those of your grandmother. Exactly like hers when I met her.
XY: I hadn't seen my grandmother when she was young, but in my memory, she was always old and withered. Not like other women who always use spiritual power to maintain their youthful beauty.
King of Xiyan: Your grandmother was once as young as you.
Season 1, Episode 21 (VK 21:31):
King of Xiyan: So you are this kind of person: cold and indifferent. Completely different from your mother and grandmother.
XY: What's so good about being like them? They ended up suffering while men reap the benefits. I've suffered enough in my life. I won't go looking for trouble from men.
King of Xiyan: You're in the royal family. Thinking this way is a good thing.
Season 1, Episode 22 (YT 25:22): CX and XY bow to Xiyan Zhongyi and Zhuoshan Chang Pu's tomb.
Season 1, Episode 22 (YT 25:50): CX and XY bow to Xiling Heng's tomb, which is positioned near Xiling Xie's tomb with similar prominence to the tombs of Xiling Xie's sons (including Xiyan Zhongyi).
Season 1, Episode 24 (VK 7:50):
Feng Long: It was wise of His Majesty and Lady Xiezu to build a town here.
Season 1, Episode 24 (VK 20:32)
XY: Are you worried that your uncles won't let you go?
Season 1, Episode 26 (VK 19:53)
Xing Yue: The people in this garden are all my relatives.
XY: But we aren't.
Xing Yue: Why not? Cang Xuan's grandmother, Lady Xiezu is the lady of the Xiling family. His grandmother's mother is my grandfather's great aunt. Speaking of which, I should call him uncle. His uncle, the leader of the Xiling family, married the lady of the Jiang family. Their son and his cousin are the cousins of Miss Jiang. Miss Jiang is the cousin of Miss Shen. I'm Miss Shen's cousin, so I can call him cousin.
XY: I'm totally confused by all these cousins on both sides.
Xing Yue: This was enough to confuse you? The Four Great Clans have been allied with the clans in the Central Plains. Starting from Lady Xiezu, you all have relatives in the Central Plains.
CX: Indeed it's true. Thinking about it carefully, we're all relatives.
XY: [thinking to herself] No wonder my grandfather has always been worried about the Central Plains. All the clans' bloodlines are intertwined.
Season 1, Episode 34 (VK 34:14):
CX's uncles: The Xiling family and Cang Xuan are blood relatives.
Season 1, Episode 39 (VK 22:10):
King of Haoling: A'Heng, do you allow Xiao Yao to marry Chishui Feng Long?
Season 1, Episode 39 (YT 42:42):
XY: He and Maternal Grandfather had the same idea! However, he is the grandson of Xiyan King and Royal Consort Xie Zu, while I can be considered to be half! I pretended to fall into his trap, and let him go and do his own thing. Don't worry about me.
Former King of Xiyan: Why are you dressed like this?
XY: I was going to kill Deyan as soon as you proclaimed him to be the Crown Prince.
Former King of Xiyan: You really are my granddaughter.
Season 2, Episode 10:
CX: Haoling Jiu Yao is the daughter of the Princess General of the Xiyan Kingdom. She is the granddaughter recognized by our most venerable Great Emperor.
Season 2, Episode 10:
Former King of Xiyan: You are my recognized granddaughter. This will never change.
Season 2, Episode 14:
King of Haoling: Your mother was the only disciple of Lade Xiezu.
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Childhood Agreement Between XY and CX
From chapter 38 of the novel:
When he met Xiao Yao for the first time, they didn’t get along at all. He was a boy but he couldn’t beat the rough and tumble Xiao Yao in a fight. He even tried to be sly and find a way to get rid of her. But gradually the two of them played together and when his parents both died it was Xiao Yao who kept him company every night. When he had nightmares it was Xiao Yao who kissed him on the forehead and vowed, “I will be with you forever.” He didn’t believe her. “You’ll get married eventually and leave me.” She hurriedly said, “I won’t marry anyone else, I will marry you and never leave you.”
From Five Gods Mountain to Xuan Yuan Mountain, from Xuan Yuan Mountain to Sheng Nong Mountain, Xiao Yao accompanied him each step of the way. No matter what happened, no matter what state he was in, she resolutely stood beside him. When Yu Jiang tried to assassinate him, it was Xiao Yao who used her body to shield him. When he was in the hidden chamber detoxing from the drugs, it was Xiao Yao who endured the agony with him and was willing to be injured but wouldn’t use Jin Xuan’s suggestion to tie him up. She knew that if she suggested it then he would do it…..
From chapter 26 of the novel:
Seeing [Cang Xuan] getting married, Xiao Yao plastered a smile on her face but had no happiness in her heart. They stumbled, they fell, they drifted, they fought, along the way her and [Cang Xuan] both grew up and now he was getting married. But this wedding wasn’t what Xiao Yao had envisioned.
In her memories: her Eldest Uncle’s wedding to the Sheng Nong Kingdom’s Princess was a lavish ceremony. She and [Cang Xuan] got in a fight, he said a married daughter was like water splashed outside. She remembered later her Fourth Auntie committing suicide, [Cang Xuan]’s nightly nightmares, her comfort that she would forever be with him. [Cang Xuan] said she would marry one day and leave him, she innocently said that she wouldn’t marry another, she would marry him.
In the trailer (https://youtu.be/MnJ2JHkOnPE?si=0uPx9LzKjLErvfwS&t=179):
XY: If I marry you, does it mean we will never be apart for the rest of our lives?
CX: Yes! My father said that "husband and wife" are people who spend their lives together, never getting separated, no matter what happens.
XY: Then we have a deal. When I grow up, I will marry you and be your wife!
CX: Deal!
In the drama (Seaason 1, Episode 1, VK 23:16):
XY: Anyway, I'm used to living on Zhaoyun Peak. I will stay here and keep you company forever, okay?
CX: Okay. But you will grow up. You'll settle down and start a family. Eventually you'll have to leave Zhaoyun Peak and me.
XY: Eh. We won't ever be parted as long as I'm your little sister.
CX: Alright, you're my little sister! And I'm your older brother, forever. No matter what, we'll be together forever.
XY: Deal! Together forever. We will never be parted.
CX: Deal!
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