My apologies if this has been asked ad nausium, but I was wondering if the italic zone names on some cards before the abliities means?

The ability can only be used/is only active when the card is in that zone.

Thanks for the clairification. Thats what I'd guessed and we'd played with. Is this in the rulebook somewhere?

Here it is.

Pag. 16

Zone Specific Effects
Some card effects are preceded by an italicized zone
name. (Kingdom, Quest, or Battlefield.) Such effects
are only active when the card is located in the specified
zone.
Example: The Runesmith has the text: “Quest. Action:
Spend 2 resources to have a target unit gain *
until the end of the turn.” If Kris plays the Runesmith
in his quest zone, he will be able to use this effect.
If he plays the Runesmith in his kingdom or in his
battlefield, he will not be able to use this effect.