The book is a take on red riding hood. The main character has a sister who is favorited by their parents and is ‘perfect’. In the first few chapters it mentions how her sisters water is always sweetened with honey. I believe they live in a mining town? Basically the wolf is a werewolf and keeps killing off the townsfolk. There’s some sort of leadership that comes into the town to help them but really just wants to take over the town. This antagonist leader at some point puts a small boy (the main characters friend?) in an ‘iron elephant’ to torture him into admitting he’s the wolf. The boy dies. The wolf ends up being her father?
Lost Classics of Teen Lit: Name That Book! 