Much like a butterface. A girl who has a great body, but a rather unattractive face. She'd be great in bed, but you just have to cut holes out of a paperbag and pop it right over her head.
GUY 1: "Hey look at that Nancy girl. Nice ass"
GUY 2: "Yeah, but look at her face."
GUY 1: "She's a real paperbag princess alright."
GUY 2: "Nice one."
A girl or young woman who realizes, like the character in Robert Munsch's book of the same name, that she needs a man like a fish needs a bicycle.
"Lauren's life as a paper bag princess meant that she'd always be using her super powers to help people who really needed her instead of to reproduce empty societal expectations."