Fantasy Chapter Book about A Magical Light From 1990

a magic light or lamp or lantern. It keeps getting "upgraded" with a more ornate exterior but the magic is weakened every time it becomes fancier. I remember dancing children that turned to stone because they needed the magic light to live.

Hi is it possible that the magic lantern or lamp had a power to show memories/ dreams and one of them or many of them was set in India or a palace and the protagonist overheard things