TO the left is a handsomely designed book, for ages 12 and up, with studiously realistic drawings by Edgar Stewart. It's Jean Guard Monroe and Ray A. Williamson's ``They Dance in the Sky: Native American Star Myths'' (Houghton Mifflin, Boston, $12.95). Despite their supernatural concerns, these American Indian stories were told by actual people, who lived in a real world. Monroe and Williamson interpret the context and meaning of each story and add facts about the status of tribes today. Arranged by region, with extensive notes and index, the book teaches while it entertains. Many of the stories have not been published before.