Royal Quarters only appear in Adventure Mode, and can be found by taking the right turn on the main stairs of Leoric's Manor (prior to patch and in Campaign, it was obstructed with rubble, but cultists of the Coven have cleared it since).
The Quarters are heavily infested with Skeletons, all of whom are Leoric's former court: from servants and bodyguards to sorcerers and jesters.
Each of the Skeleton types below can be encountered in Monstrous variant, with greatly empowered damage and Life. However, Monstrous skeletons are much less common than normal ones. There is a high (but not guaranteed) chance to encounter one or more unique skeletons, one of which can be nominated a bounty.