Annie There is a theory out there that book was an analogy/allegory of the Silver standard controversy happening in the late 19th century. The wizard represents William Jennings Bryant and his ilk, the emerald city is Washington DC. In the book, Dorothy's shoes are silver, not ruby, and represent the nation's silver, while the yellow brick road represents the Gold Standard. There's a lot more to it, I'd recommend googling it if you're interested.
Steven Davis L. Frank Baum posited himself as the Royal Historian of Oz. Noted in the Annotated Wizard of Oz, there is evidence in the books that points to Oz existing on Earth as part of an unknown continent somewhere in the southern Pacific Ocean.