IT WAS supposed to be a grand day for Princess Pale Moon. Two eagle feathers in her hair, she led a pony down Pennsylvania Avenue in Ronald Reagan's inaugural parade. She marched behind the Dixon High Marching Dukes, the president-elect's home-town band.

The five-foot Cherokee Indian who calls herself "America's Contemporary Pocahontas" had started in show business when she was 8, and spent more than 30 years on the road. Now three television networks would focus on her. Her fame had grown during the Bicententennial, when she was invited to be the Indian on the reviewing stand for ceremonies in 150 cities and towns across the country. She had played Europe for the USO, Montreal for the Olympics and Monday Night Football when the Cowboys met the Redskins.

She had sung at the GOP National Convention in 1976 and again in 1980, and now as she stepped lightly into the living rooms of television's millions, Barbara Walters singled her out:

"She said I was the Republican Party's Indian," Pale Moon recalls. "That hurt," she says, hurt more than anything. Even more than when her classmates used to call her squaw.

But Pale Moon says she will endure. She has a purpose.

"I know that some Indians look at what I do and think I'm an Apple Indian: you know, red on the outside and white on the inside . . . I know that sometimes I'm the token Indian, but that's okay. I allow them to use me so I can get my message across."

Pale Moon's message is that "Indians are real people. We hurt just like you, and we enjoy succeeding just like you. We are not the savages of the forest you see in the movies."

Pale Moon tells this to groups of Americans "who have never seen an Indian except the kind killed by John Wayne." She tells them this early in her show, and then, in the time it takes a tear to reach a cheek, she trots out war bonnets and peace pipes, brings on the White Eagle Dancers--her sons John Mark Little Bear and Robbie Swift Arrow--and gives away rabbit pelts to teach the "Lesson of the Indian Giver."

She does all these things, she says, to help America's first minority. "I'm more of a communicator than an entertainer," Princess Pale Moon says, "so in time, people like Barbara Walters will get my meaning. The Indian people, my people . . . they need me."

The occasion is Mayor Marion Barry's Indian Art Month celebration, and Pale Moon, a Fairfax County resident, age "400-plus moons," is playing the District Building, wearing a cape of 42 rabbit pelts in the chambers where the City Council meets. About 100 people have come, many Indians in town for the Night of the First Americans, the rest District Building staffers who have shown up after work, intensely interested in the tuna fish finger sandwiches, jelly beans and dry yellow sponge cake.

Pale Moon walks close to the crowd, padding in moccasins of Indian leather and Czechoslovakian beads. The shoes were crafted, like the beaded handle of her wireless microphone, by Pale Moon's friends, Silverhair and Morningstar Greenlee. As the first few bars of canned accompaniment well from her 100-watt Whirlwind speakers, Pale Moon makes eye contact and smiles.

"This is a song about this country," she says, introducing "This Is Our America," the song that her second husband, Wil Rose, wrote for her performance at the '76 GOP convention. It is featured on her third album, "Walking in Beauty," released by Word/ABC of Waco, Tex.

"It is a song about my land, and, of course, now your land as well, because this is no longer just Indian land. A lot of it has been taken away, as you know, a very tragic history, a very tragic story to tell. But this land now belongs to all of us, and I believe once we are in harmony with our creator and with the land, then we can be in harmony with each other."

She dips her head like Wayne Newton preparing to croon, then raises her eyes to the roof. Trumpets flourish, she belts . . . This is our America, the land of liberty/ People from throughout the world, help make a great countryyyy . . .

Wil Rose sits to the side. Her husband and mentor, Pygmalion to her Galatea, he looks enraptured, or lost in calculation. Rose, 50, was once president of Dwight Eisenhower's People-to-People Foundation. In 1966, he was named one of the Jaycees' 10 Outstanding Young Men of America.

Long before Reaganomics, in the social welfare years of Camelot and the Great Society, Rose figured that voluntarism would be the hook of the future, that he could put a price tag on conscience and sell it to the private sector in the name of good works and tax breaks. In 1968, he hit on the concept of franchised philanthropy and started the American Heritage Foundation. Today, American Heritage does the bookkeeping and legal work--at an 8 1/2 percent fee--for some 2,000 charitable groups, from the Abundant Life Foundation to the Zadnick Kidney Foundation.

A former Hollywood voice-over announcer, Rose met Pale Moon in 1961 when she was singing at a wedding in San Jose, Calif.

She had been singing since she was a child. Her name in those days was Rita Ann Sentz, three-quarters Cherokee, who sang barefoot mountain harmony with her brother and sister. They lived with their mother in Asheville, N.C., and toured the Great Smokies, and before long, the three Cherokees in home-sewn shirts were known in every burg and holler for a hundred miles around.

Their brand was home-style a cappella, songs in three-part like "Blue Mountain Girl" and "Old Uncle Ned." Elder sister Mary Jean sang soprano, Rita Ann sang alto. Little Johnny stood on a chair to reach the microphone.

The trio split after a time, but Rita Ann stuck with it. Soon she became the poster girl for a shoe company in Asheville, and did shoe jingles on the radio. She played all the school talent shows. Her favorite number was an Al Jolson rendition of "Swanee." She wore blackface for the act and threw cornbread to the audience as a kicker.

What followed were years of church choirs, pickup bands and one-Indian road shows. Along the way, she received some formal training at Sonoma State College in Santa Rosa, Calif., where she played the title role in "Cinderella." "I got to wear a blond wig for that," Pale Moon recalls. "It was platinum. It was beautiful."

Then along came Rose. Smooth-featured and smooth-talking in three-piece and pin stripes, Rose saw Pale Moon not just as a singer but as a symbol. "I looked at her as a child whose father was a cobbler yet who had holes in her shoes . . . I'm an impresario of a strange nature. I see ability in people. I want to bring it out, emancipate it so they can reach their highest potential. I like the whole notion of being a mentor. Pale Moon was making appearances, and she had started to develop her message, but she needed to establish a charitable scope."

For years the two kept casual contact, Rose molding and tutoring and lecturing her in his spare time. Then, in 1973, Rose plotted Pale Moon's career goals on a PERT chart, a systems and operations technique used for developing, among other things, the Polaris missile.

Then he established her "charitable scope"--the nonprofit American Indian Heritage Foundation. All of Pale Moon's earnings go to the foundation, which pays her traveling expenses, but no salary. She lives on Rose's income as a $1,000-a-day independent charity fund-raising consultant. As the Indian foundation's service representative, Rose is supposed to be paid 5 1/2 percent of the foundation's take, but Pale Moon says he has declined to be paid for the last four months.

Pale Moon's earnings, combined with donations, enable the foundation to give away about half a million dollars a year in Indian-language Bibles, Thanksgiving turkey dinners, scholarships to leadership seminars and scholarships to summer basketball clinics at Oral Roberts University.

With PERT goals well under way, the script took an unseen romantic twist. In 1977, Pale Moon and Wil Rose were married on the Cherokee Reservation in the Great Smokies.

The Rev. Enoch Owl and the Rev. Bushyhead presided at the traditional Cherokee ceremony; television cameras witnessed. Pale Moon gave Rose a fresh ear of corn, a symbolic promise to tend the garden. He gave her a piece of dried venison wrapped in deerskin, a symbol of the hunter's promise to bring home the food.

"It was a beautiful, touching wedding," Pale Moon says, even though it came suddenly. "I didn't think Wil thought of me in that way."

It was held on a beautiful spring afternoon. Rose had come to the reservation from Washington, where he was administering the American Heritage Foundation, and the two went for a walk in the woods. Along the way, they stopped to listen to a creek. He looked deeply into her eyes.

"I have something to discuss with you," he said, and handed her a box.

Inside was a diamond set in turquoise.

"I was flabbergasted," Pale Moon remembers. "I thought he was going to give me another one of his mentor lectures."

In the living room of her spacious ranch house near Seven Corners, Pale Moon sits on a couch, stroking her white Maltese puppy and feeling a little overweight. She's on a liquid diet. "I was starting to feel like Princess Full Moon," she jokes. Rose sits next to her, his vest still buttoned and his tie still tight at 9 p.m.

The room, done with Ethan Allen furniture, is somewhat cluttered, with a half-dozen silver candelabra on the mantle, smoked mirror tiles on the walls, a Kimball organ in the corner. Somewhere in the house, Robbie Swift Arrow, at 15 the older of the two White Eagle Dancers, is tearing high-decibel punk from an electric guitar.

There is disagreement on the couch, although the parties keep smiling. Pale Moon has again brought up two offers she's recently received. One is from an arranger in Florida who wants her to drop her "Indian routine" and do songs like "Thank God I'm a Country Girl" while wearing gingham checks and braids. The other is from a Hollywood studio that wants her to do a screen test for "a sitcom about an Indian family."

She sighs as she talks of these opportunities, and for just a moment, Pale Moon seems to lose touch with her message. For just a moment, she looks not like a symbol of American Indianhood, but a bronze-skinned woman who's paid her dues at trailer parks and church bazaars, who last August was hospitalized with chest pains. For these last few years Pale Moon has flirted with the big time. She's been to the Kennedy Center. She's stood in the spotlight.

"You know," she says, "there are some Indian performers, like Wayne Newton, who come out on stage wearing a buckskin shirt or a big silver eagle belt buckle, but they won't say much about being an Indian. But I think that if I can get the kind of recognition that he has, I could use that as a kind of platform to speak out for Native Americans. I could handle all the superficiality and the glitter if I would still have a chance to send my messages."

Wil Rose is skeptical of these kinds of offers, of veering from the PERT Chart plan of having Pale Moon make most of her appearances before large audiences--on TV and at various major celebrations. "You have to consider what constitutes your highest and best use," he reminds Pale Moon, whom he endearingly calls "P.M."

Instead, Rose has his own "fantastic prime-time TV concept," in which Pale Moon would welcome a celebrity from a different ethnic background each week and the two would explore the guest's culture. Rose would also like to see President Reagan appoint her "U.S. Ambassador of Friendship," so she could sing for foreign dignitaries around the world.

And then there's Rose's big dream, his concept to end all concepts. Rose would like to see Pale Moon pose for a statue to be planted on Alcatraz Island: "The Pale Moon Indian Statue of Liberty."

Hearing Rose tell of this, Pale Moon's eyes go distant again. Then she perks anew: "You know, Wil, in the sitcom I'd be playing a liberated Indian woman." That would be a message, too.

But a sitcom Indian woman, be she liberated or not, isn't what Rose envisions for Pale Moon. For Rose sees a difference between half-hour sitcom and permanent American symbol, between actress and icon, between playing a part and living it, between a spot on "The Tonight Show" and a paragraph in a history book. A statue on Alcatraz Island. A Pale Moon statue on Alcatraz Island. Now that would the difference between shtick and "highest and best use."

And, says Wil Rose, "It would be good for the country."