I guess it makes some sense they did not quite realise exactly what was going on behind the scenes and precisely what they were giving up. They did, though, presumably know that once they gave their wishes to Magnifico that they couldn't remember them and also that a lot of wishes were never granted. They also would have known it was the king who decided which wishes to grant. None of that was really hidden. In fact, it was all very public! This is where I shrugged a little at the stakes: it's a lot to give up, but then they also seemed to be getting a lot in return. I will say that Asha may become a lot less popular when they have to start paying taxes!
This might all seem like nit picking, but the world building really didn't work for me. If this is supposed to be a throwback, I think if you go back to even the less successful Disney films of the 1990s like Pocahontas, Hercules, or Mulan you find clearer stakes, more cohesive world building, and better character development.