Don Quixote Volume 2, Chapter 33
The Duchess asks him to clear up some discrepancies in the book written about him and his lord; namely, since he had never met Dulcinea and was unable to deliver the letter, why did he lie about seeing her and seeing her in so unseemly a fashion -- sifting wheat! She goes on to add how harmful this was to Dulcinea's reputation and the reputation of good squires everywhere. Sancho checks behind the curtains to make sure no one else can hear before explaining himself.
He explains that his master, though the most sensible of men at times, is crazy; so, Sancho makes up things and stories and goes on to explain how he fooled Don Quijote into believing Dulcinea is enchanted. The Duchess asks him how she should feel about making him governor since his judgment -- he continues to work for a crazy man -- doesn't look too good. He commends her good judgment and admits that perhaps it would be wiser to not give him this post. Doña Rodriguez agrees with him and illustrates her point using the graphic example of what happened to King Rodrigo (pg. 539).
The Duchess says they will keep their promise to Sancho, and that she thinks that a magician planted a false idea in Sancho's head -- the idea that Sancho fooled his master about the homely girl on the horse; for she has found out from a reliable source that it truly was the enchanted Dulcinea! Sancho says this could be true and would make his master's story of his experiences in the Montesino's Cave more likely to be true too. They agree that this all certainly makes more sense than Sancho being the kind of squire that would lie and trick his master.
She tells Sancho he may go and nap. Before he goes, he asks the Duchess if she can find out if his donkey is being taken care of. She says she will go see the donkey herself -- but Sancho refuses this offer. She tells Sancho that he can take his donkey with him when he becomes governor and spoil him. Sancho says his won't be the first ass sent to serve as governor.