It appears as some sort of a cutlass. But the sharp edge was replaced by a long pole with a light-blue ruby on top.
The princess possess magical powers from her mysterious wand. The wand creates rainbows with just a swing but possibly more being that she was relieved to get it before it got into the wrong hands.
In the episode "The Rainbow Wand", the princess lost her magical wand which, oblivious to her, was recently found by Izzy back at Pirate Island. They journey off to the Pirate Princess' castle to return it, but are followed by Captain Hook and his crew. After reaching the castle, they use the princess' pet sea serpent Cecilia to get rid of the captain. The Pirate Princess uses the magic of her wand to create a rainbow which leads Jake and his crew home.
The Rainbow wand plays a larger role in the episode "The Never Rainbow". The Princess' rainbow wand has run out of power. Luckily for her, the legendary Never Rainbow has appeared over Pirate Island, Never Land and the Never Sea. The rainbow leads to the Dazzling Diamond which if taped by the wand, the said wand will be empowered. However, as the crew set off, Captain Hook learns from his crew that every rainbow leads to treasure, urging the captain to go after it. Once both team of pirates meet and the diamond, the Pirate Princess manages to recharge her wand but Hook still attempts to steal the treasure. Unfortunately for the villain, the Never Rainbow vanishes along with the diamond leaving the captain treasure-less. Back on Pirate Island, the Pirate Princess lets her friends Izzy and Jake try out the fully charged wand. In the process, Jake accidentally zaps Hook with the rainbow rays comically turning Hook into an all colorful version of his former self, just as he just desired to never see a rainbow again.
The Rainbow Wand was the key to defeating the princess' old foe The Sea Witch during their epic battle in the episode "Season of the Sea Witch". The witch prepares to blast the Pirate Princess right before Jake and his crew arrive with the rainbow wand. Izzy throws over to the Pirate Princess and the latter finally blasts the Sea Witch, transforming her into the beautiful Misty the Wonderful Witch.