Revealing mistake: In the scene where the tornado is about to hit and Aunt Em and Uncle Henry are going into the cellar, you can see that some of the trees are blowing around violently, and others aren't moving at all. (00:16:05)
Continuity mistake: When Dorothy is holding Toto in the last scene, the dog is facing to the left, but in the very next shot he's suddenly facing to the right.
Revealing mistake: As Dorothy is about to walk into the cyclarama (backdrop) as she leaves MunchkinLand, a Munchkin Soldier on the very far right is too far and becomes transparent with the matted-in flowers. (00:33:40)
Revealing mistake: When they meet the Wizard for the first time, his big projected head doesn't reflect off the shiny floor, like everything else. (01:09:54)
Continuity mistake: When Glinda starts to sing, a Munchkin is seen coming out of an open sewer with its lid on the side. When the angle changes, the munchkin is nowhere to be seen and the sewer is closed.
Continuity mistake: When the cyclone arrives, the farmhands let out the horses, which run wild through the farm. In the immediate wide angle there's no sign of humans or animals anywhere.
Continuity mistake: When Dorothy extinguishes the fire on the Scarecrow's arm, the Witch keeps swapping between: close, far, next to a window, plain wall; all in a matter of seconds.
Continuity mistake: When Dorothy is in bed saying "there's no place like home", after the angle cuts the position of her pigtails over her dress has changed.
Continuity mistake: Miss Gulch rides away on her bike and Toto jumps directly off the back onto the dirt road. There should be tire marks on the dirt where he falls directly behind the bike, but there aren't. (00:10:30)
Revealing mistake: As the Tin Man busts down the Witch's door with his ax if you look closely you'll see a slight edit in the film right before he takes his last swing. What they did was unlock the door before the last swing so it would open. You can see the dead bolt retracted as the door swings open. (01:23:50)
Audio problem: When the Scarecrow says "You see, it's very tedious being stuck up here all day long with a pole up your back," his mouth is saying something else. (00:33:50)
Deliberate mistake: Before Dorothy is sent to Kansas there's a close-up of her shoes. All of the group's feet, Glinda's dress, and the rest of the elements around are gone and replaced by a black background. Despite being a deliberate directorial decision to give the shoes a more dramatic focus, it is really awkward to see everything disappear, nevertheless.
Continuity mistake: When Hunk hits his hand with the hammer there are two brooms leaning against the barn behind him. In the next shot they're gone. (00:03:45)
Visible crew/equipment: As the Wicked Witch stands on the balcony with the hour glass a cameraman's shadow can be seen moving across it near the hour glass. (01:24:15)
Visible crew/equipment: As the Wicked Witch prepares to leave for the Emerald City on her broomstick shadows appear on the painted wall depicting the sky behind her. (00:57:50)
Continuity mistake: When Toto escapes from the witch's castle and runs off to the Tin Man, the Scarecrow and the Lion to lead them to rescue Dorothy, he can be heard barking. As he is running up to the three, he is still barking, but his mouth is quite still and his tongue is hanging out. (01:19:30)
Visible crew/equipment: The apparatus on the Scarecrow's chest that's attached to the wires above his head can be seen sticking out in several shots as Dorothy walks up to him. (00:35:30)
Continuity mistake: After the Wicked Witch of the West lights her broomstick and the scarecrow on fire, and Dorothy throws the water on her, in the next shot after the water hits her, you see the broomstick laying next to her burnt out but not smoking. (01:26:20)
Other mistake: In the first shot of the movie we see Dorothy and Toto running home. Several shots later when we first meet Hunk, Zeke and Hickory we see the exact same background spot used again behind them. Dorothy was also running in the wrong direction. (00:03:05)
Continuity mistake: There's a big mistake when we first see Prof. Marvel's wagon. If you look closely, the entrance steps that can be seen reflecting the light are upside down and would have to be set right before they could walk inside. (00:11:20)
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.