She is the paper version of Princess Peach seen in the game.
Not much else is known about Paper Peach yet but, as seen in the trailer, she is seen surprised to see the mainstream version of herself.
She was once kidnapped by Bowser along with Princess Peach and was rescued by Mario, Luigi and Paper Mario. She celebrated with everyone on top of Papercraft Peach with Princess Peach. She returned to her normal world with Paper Mario. However, unknown that she was screaming about Bowser.