Later life
William Crichton, 3rd Lord Crichton of Auchingoul (grandson of Lord Chancellor Crichton) is said to have "deliberately debauched Margaret" (James III's youngest and favourite sister), after discovering that his wife had been seduced by the king. Regardless of the truth of this story, Margaret did become Lord Crichton's mistress, which led to her disgrace and reputation for immorality and corruption. Their illegitimate daughter, also named Margaret, was born between 1478 and 1485 and raised in the royal court. A dress was bought for "Lady Margaret's daughter" in 1496, and she married William Todrick, an Edinburgh merchant, and after his death in 1507, an Edinburgh merchant George Halkerston, and thirdly, George Leslie, 4th Earl of Rothes.
Margaret had a son also, James Crichton, who married Catherine Borthwick, the eldest daughter of William, Lord Borthwick.
Lord Crichton joined Margaret's brother Alexander Stewart, Duke of Albany, in his rebellion against Margaret's eldest brother, the unpopular King James III. On behalf of the duke, Lord Crichton garrisoned his "very ancient and magnificent" castle of Crichton, for which his lands and titles were forfeited by the Parliament of Scotland in 1484, when Albany was sentenced for treason. His castle was granted to a minion of James III, Sir John Ramsay of Balmain.
According to historian George Buchanan (who was "always hostile" to the Stewarts), Margaret had an incestuous relationship with her brother the king. However, James III's most recent biographer, Norman MacDougall, has firmly rejected this on the grounds that the rumour seems only to have come about as a direct result of the political tensions of James' reign and of his descendant Mary, Queen of Scots, in an attempt to blacken the reputation of both James III and the Stewart dynasty (for comparison, see the rumours that James had poisoned his wife, Margaret of Denmark). Though there are few contemporary references to her, later writers were unsympathetic in their descriptions of the princess, in particular peerage writers of the nineteenth century. John Riddell called her "a person, although young and beautiful, of depraved character, being even charged with too much familiarity with her own brother." Balfour-Paul agreed, stating that Margaret was "a Princess of great beauty, but of a reputation that was more than loose."
Sir Walter Scott wrote:
[After garrisoning his castle and fleeing to England,] William, the hereditary Lord of Crichton, pined in exile, from which he is said to have been recalled under the following circumstances: The Lady of Crichton, says Buchanan, died soon after her husband's flight to England; and the king, desirous to hide the disgrace of his favourite sister, who was almost frantic for the loss of her paramour, recalled Crichton from banishment, on condition of his marrying the Princess Margaret. They were wedded accordingly, and Crichton seems to have obtained restitution of that part of his fortune which descended to him by his mother, the Barony of Frendraught, namely, in the North, which from this time became his residence, and that of his successors. Crichton was reconciled to the king, and admitted to his presence at Inverness, during an expedition which James made towards the North near the conclusion of his reign. He therefore entertained hopes of obtaining a full pardon, but neither of the brothers-in-law long survived the interview. Crichton died at Inverness, where, according to Buchanan, his monument was extant in the time of the historian. It seems uncertain whether the son who survived William Lord Crichton was the child of the Princess Margaret; but he left a daughter, their undoubted issue, who became Countess of Rothes.
If Scott's account is accurate, Margaret, then Lady Crichton, may have spent the rest of her life at Crichton's residence "in the North", at the Barony of Frendraught. However, it is known that Margaret became a resident of Elcho Priory near Perth in 1489 and remained there for some years during the reign of her nephew, James IV (r. 1488–1513), whose account books show frequent disbursements for "supplies for the Lady Margaret," one, in particular, for "a new dress for the ladye in Elquo."