No problem
The princess was living in a faraway land.
The princess was living in a far away land.
You will see this is many sentences, but I dare say it's more of an idiom (possibly originating from misspelling faraway). The reason I say this is that you can't replace
far away here with any other place adverbial.
E.g.
*
The princess was living in a somewhere land 
I am far away from ending my book.
*I am faraway from ending my book.
Hope this helps. We could wait for some more opinions
