The Protectorate annually gives up its youngest child as a sacrifice to the witch in the woods
This is a lie created by the Council of Elders, in order to drown the village in its own sorrow and stop its people from "thinking", creating a subdued people who are easier to rule.
There is no Witch in the Woods, however there IS a witch called Xan who travels from far away on this day in order to claim the poor baby who would've otherwise been eaten by the wild animals. And she takes it back to her town to find a suitable loving family for it.
It's a long journey though, and she has to feed the baby something.
Starlight (literal starlight, she scoops it from the sky) is nutritious and filling and tasty and, in large quantities, can awaken the best in a baby's heart and soul and mind.
However, MOONlight is a different matter. Moonlight is magic.
Xan accidentally feeds this year's baby moonlight, making her enmagicked. And appropriately names her Luna. (Hence the name of the book)

On the other hand, we have the newest youngest trainee in the Council of Elders, Antain, who disdains at this ritual and insists that they stay with the child in the woods to negotiate with the witch. But they ignore him, they don't tell him they intend to let the baby die and that there's no witch. Antain grows more suspicious over the years until he leaves the council.
Then he gets married. Has a child. His child is the youngest that year.
Antain goes out to kill the witch.

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I listened to the audiobook. The first half was an utter delight, but after that I became less engaged.