What is the meaning of the term "royalty"?

The term "royalty" may be used in various senses and with different meanings. It may be used merely to indicate a basis for computing compensation for consideration given, and thus establish a contractual right to recover that compensation. It is commonly used to indicate a reservation by the owner of land with mineral rights on the granting of a "lease" or right to search for and remove the mineral in question. When so used, the reservation or royalty binds, not merely the lessee, but also any assignee of the lessee. It has been referred to as a reservation, operating as an exception out of the demise: Spooner v. M.N.R., 1930 CanLII 310 (FC), [1931] 1 D.L.R. 723, [1930] Ex. C.R. 229; reversed 1931 CanLII 64 (SCC), [1931] 3 D.L.R. 136, [1931] S.C.R. 399.