From the Super Mario Wiki, the Mario encyclopedia
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Paper Peach is the paper form of Princess Peach that appears in Mario & Luigi: Paper Jam, based on Peach from the Paper Mario series. Alongside many other paper characters, she came out of a book. Like with the other paper characters in the game, Paper Peach is an independent character from Princess Peach.
Paper Peach, along with Peach, is kidnapped by Bowser and Paper Bowser. When Mario, Luigi and Paper Mario explored a certain area of Sunbeam Plains, the Bowsers summoned Petey Piranha to slow the trio down, and after they beat Bowser Jr. and Paper Bowser Jr., they save the two Peaches. After Bowser and Paper Bowser are defeated, all the paper characters go back inside the book, bidding farewell to their counterparts.