Continuity mistake: The length of the bristles in the Witch's broom changes throughout the movie. (00:29:15 - 01:26:10)
Continuity mistake: In the scene where Dorothy is confronted by the wicked witch and the lollipop disappears from her hands, notice how the flowers keep moving positions in her hands. (00:29:30)
Continuity mistake: As the Wicked Witch walks over to her sister a rocking chair is protruding through the broken window. In the next shot the window frame disappears and it's not a rocking chair anymore that's protruding from the window. (00:29:45)
Continuity mistake: When the witch leans over to claim the slippers, she goes really close to them and her broom is practically touching them. Not to mention she also casts a significant shadow on the wall of the house. In the close-up of the slippers disappearing, however, the witch's broom and her shadow are not in the shot although they should be. (00:29:50)
Continuity mistake: Glinda tells Dorothy, "Their magic must be very powerfulÂ…" and Dorothy has her left hand around Toto. In the next shot she's holding the flowers in front of her. (00:30:20)
Continuity mistake: Just before the Wicked Witch leaves Munchkinland she says to Dorothy, "just try to stay out of my way" and her broomstick is facing upwards. In the next shot it's facing downwards. (00:30:35)
Continuity mistake: After the Wicked Witch leaves Munchkinland Dorothy is standing in front of Glinda one step below the top. In the next shot from behind she's two steps below Glinda. (00:30:55)
Continuity mistake: Glinda says to Dorothy, "I'm afraid you've made a rather a bad enemy of the Wicked Witch of the WestÂ…" and the mayor of the Munchkin city walks up from behind them. In the next shot he re-approaches them from the left. (00:31:00)
Continuity mistake: The Lollipop Guild teleports all over the scene. As Glinda departs, they are behind Dorothy. As Glinda's bubble rises, several Munchkins run to where she was and wave goodbye, green shirted Lollipop Guilder (Jerry Maren) among them. Cut to Dorothy and Jerry's still behind her. (00:32:40)
Continuity mistake: Before Dorothy leaves Munchkinland she has a blue flower in her basket. She never touches the basket but as she dances out of town it's not there. (00:32:55)
Continuity mistake: When Dorothy first meets the scarecrow, there is a patch of grass in front of the field the scarecrow is in. On the grass there's two beds of flowers. The flowers change colors from when Dorothy meets the Scarecrow, to when the Scarecrow starts his "If only I had a Brain" song. (00:33:00 - 00:35:30)
Continuity mistake: As the Munchkins send Dorothy off singing "We're off to see the Wizard" the red coated guard is hanging out of his booth as he waves his sword. In the next shot he's inside the booth tapping time with his sword. (00:33:30)
Continuity mistake: When Dorothy first meets the Scarecrow there are no pumpkins on the left side of the Yellow Brick Road. Later when he starts to dance pumpkins have been added. (00:33:55 - 00:36:50)
Continuity mistake: In the scene where Dorothy meets the Scarecrow, there are no pumpkins on the ground while the Scarecrow is tied to the pole. After Dorothy gets him down, pumpkins are then everywhere behind the place that he fell. (00:34:00 - 00:35:45)
Continuity mistake: As she talks to the Scarecrow, Dorothy says to Toto, "Wasn't he pointing the other way?". In several of the close up shots wind is blowing her hair around and in others it isn't. (00:34:30)
Continuity mistake: When Dorothy first spots the Scarecrow the piece of rope hanging off his left arm is about 1 inch long. Without touching it a few shots later it's grown longer by about four or five inches. (00:34:30)
Continuity mistake: When Dorothy is talking to the Scarecrow for the first time, the Scarecrow moves further down his pole between close up shots. (00:34:35)
Continuity mistake: The rope around the Scarecrow's neck is tied differently throughout the scene after he meets Dorothy. The rag around his hat is rearranged also. (00:34:50 - 00:36:20)
Continuity mistake: As Dorothy and the Scarecrow exchange, "How do you dos" the straw coming out of the left side of his shirt triples between shots. (00:35:05)
Continuity mistake: During the sequence where Dorothy meets the Scarecrow, Dorothy's pigtails are first short (above her shoulders) and as the song progresses her hair gets longer (below her shoulders), then short, and then long again. (00:35:15)
Answer: In the film it's left ambiguous. At the end it's strongly implied that she was dreaming. The characters she meets all look like people she actually knows. In the original book, she actually went to Oz.