Oz, left to himself, smiled to think of his success in giving the Scarecrow and the Tin Woodman and the Lion exactly what they thought they wanted.  "How can I help being a humbug," he said, "when all these people make me do things that everybody knows can't be done?  It was easy to make the Scarecrow and the Lion and the Woodman happy, because they imagined I could do anything. But it will take more than imagination to carry Dorothy back to Kansas, and I'm sure I don't know how it can be done."

This would appear to be an Orange situation. In a recursive land doing an As-if-it-were is magical. They don't just think they are more brainful and heartful and braveful. They actually are so, they don't just imagine it.

To sum up then.
The Land of Oz is laid out in the order of the Rainbow. The order of Recursion. It is Faerie, Tir nan Oz.

...Also Dorothy proceeds through it in the order of the Rainbow.

Purple North - the Good Witch of the North, the Kiss

Blue East - Silver Shoes, Munchkins, Boq, Scarecrow, Nick, Lion, Kalidahs, River, Stork, Poppies, Mice

Green Center - Ozmies, Guardian of the Gate, the Great Oz, the Guardian of the Gate

Yellow West - Wolves, Crows, Bees, Winkies, Monkeys, Witch, Bucket

Orange Above Center - humbug magic, Scarecrow, Nick, Lion, Balloon

Red South - Trees, China, Spider, Hammerheads, Monkeys, Glinda, Shoes

...As well the episodes among the Munchkins are in the order of the Rainbow

Purple - Combination   Dorothy takes the Silver Shoes which she must have to get home from

Blue - Context, Rulership  the Land she is in, Munchkins, Boq

Green - Commitment  Her gang, Scarecrow, Nick, Lion

Yellow - Limits  Each does what they can to get past, Kalidahs, River

Orange - Control, Skill  Abilities are also brought into play with a Raft

Red - Conflict, Death  Resolution of Conflict, the little aids the large, Poppies, Mice

...And the trip to Glinda is in the order of the Rainbow

Purple - Combination   The Trees join to make a barrier for

Blue - Context, Rulership  the land they enter, the China Country, which is very vulnerable to any disturbance

Green - Commitment  King of Beasts by killing the Spider

Yellow - Limits the Hammerheads cannot be solved by any of their native abilities

Orange - Control  but Dorothy has control over the Monkeys

Red - Conflict  which brings them to the resolution of Conflict, Quadlings, Glinda

The progress of Dorothy through Oz is the process of Theosophic Recursion within Recursion and you can't get more recursive than that. Ultimate interaction with reality. Ultimate beginning of the growth of the real self. And without the preachiness.

The reality of Oz was very much greater than the usual fairy story. After all, not only is Oz real from a Theosophist point of view, but to the extent that Theosophist Ontology is valid it would be real from anyone's point of view. If any fairy land exists, Oz exists, sort of thing.

And though Wizard was probably written as a one off, Oz was, after all, in terribly mundane shape for a fairy land, with fields of grain on farms, money, old age, death, cats, dogs and chickens. Something had to be done to set it to rights. A sequel was required. If not by Baum, then by the rest of us. And amazingly, subsequently, by the rest of us again and again.