
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)
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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)
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Continuity mistake: There are two actresses playing Dorothy (and two dogs playing Toto) as she opens the door to Oz. The first is a stand-in wearing a dull colored dress in order to make it look black and white. After she opens the door and moves out of the way, Judy Garland is who we actually see walking through. Look at the different pleats on the two dresses. (00:19:25)
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Continuity mistake: After the Tin man opens the door with his axe chopping its wood, Dorothy steps out and the door is totally fixed.
Sacha

Continuity mistake: Back in Kansas, Dorothy holds Toto and her pigtails swap from being behind to in front.
Sacha

Continuity mistake: Inside the Emerald City, when they are at the palace entrance, the guard's mustache is turned up in the first shot, and is turned down in his next shot. (01:04:45)
violets69
Continuity mistake: When Toto escapes, he runs up to the three putting the Scarecrow back together and the Tin Man has nothing in his left hand. In the next shot the ax appears in his hand. (01:19:40)
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Continuity mistake: You see a Flying Monkey with Toto before he gets picked up. (01:15:30)

Continuity mistake: At first the Tin Man starts chopping the top part of the Witch's door with his ax and two shots later he's chopping about two feet lower, near the handle. If you look closely when he eventually gets the door open, the top part has not been touched. (01:23:40)
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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)
andyo22
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.