Continuity mistake: In the scene where the Scarecrow comes down off the pole and onto the yellow brick road, some of his stuffing falls out. You can then see Dorothy pick it up and put it back in. After Dorothy agrees to take the Scarecrow with her and they begin to skip away, you can see the straw that Dorothy supposedly picked up and put back inside the Scarecrow on the road again. (00:37:45)
Continuity mistake: When the Scarecrow sings, " In trouble or in pain" Dorothy grabs him and is holding her basket with her left hand. In the next shot the basket is on her forearm. (00:36:55)
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: When Dorothy starts singing, "It really was no miracle " we see two Munchkins on the bridge. One in a red and white bonnet and the other has a distinctive blue hat. In the previous shot they are together on the other side of the stage on Dorothy's left. (00:23:40)
Continuity mistake: When they first meet the Tin Man a purple bird with a red beak appears and disappears several times near the house behind them. (00:41:20 - 00:42:20)
Continuity mistake: The Wizard holds the Lion's medal in his left hand when he takes it out of the bag. In the next shot it's in his right. (01:30:50)
Continuity mistake: As she holds Toto in her left hand, Dorothy looks around Munchkinland and says, "We must be over the rainbow". In the next shot she's holding him in both hands. (00:21:00)
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: The Witches bronze astro globe moves from the window sill in different shots of her castle office. (01:16:10 - 01:18:35)
Continuity mistake: During the Lion's king song, the Tin Man breaks a flower pot and places it on the Lion's head as a crown. In the wide shot, the Tin Man's hand is still on the crown, but when it cuts to a closeup of the Lion the Tin Man's hand is suddenly gone. (01:06:00)
Continuity mistake: When Glinda tells Dorothy to follow the yellow brick road, there are many Munchkins around. A second later, when she is about to vanish, they've all disappeared.
Continuity mistake: When Dorothy is walking on the pig sty platform and talking to Zeke, he is pouring the pig feed into something. The amount of feed he is pouring changes between shots. (00:04:00)
Continuity mistake: When Glinda starts singing, "Come out, Come out" she's not on the Yellow Brick Road. In the next shot she is. (00:22:55)
Continuity mistake: When Dorothy comes running into the farm at the beginning of the movie, there's a lone cow in the pen behind her and a couple of white chickens that she ends up chasing in the direction of the camera as she runs near the house. Two shots later the cow disappears and the white chickens are now in the pen. (00:02:55)
Continuity mistake: The large pile of wood next to the house is entirely rearranged throughout the scene when the Wicked Witch throws fire down at them. (00:45:55 - 00:47:30)
Continuity mistake: After the Wicked Witch turns the hourglass over and leaves, Dorothy walks back towards her throne. If you look closely the book of spells, which has not been touched, is open to an entirely different page then when we saw it earlier in the scene. (01:18:15)
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: We see a Munchkin in a blue shirt climbing out of a manhole in the middle of the Yellow Brick Road and he has a prominent red scarf on. The wardrobe Continuity Person goofs because whenever we see him again, as in a glimpse in the very next shot and when Dorothy leaves Munchkin Land, the red scarf is gone. (00:23:20 - 00:33:25)
Continuity mistake: In the scene when they discover the Wizard behind the curtain there is a change in the equipment on his wall. At first the big lit up gauge thing with the two levers above it is lit, about a minute later when the Scarecrow gets his diploma the angle has changed and the gauge thing is dark. (01:28:55 - 01:29:55)
Continuity mistake: When Dorothy walks up to the talking apple tree his arms are spread wide apart. In the next shot his left hand is pointing at the apple she picks. (00:39:30)
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.