At the beginning of this story, it is made quite clear that Dorothy Gale (the primary protagonist of many of the previous Oz books), is in the habit of freely speaking of her adventures to her only living relatives, her Aunt Em and Uncle Henry. Neither of them believes a word of her stories, but consider her a dreamer.
Later, it is revealed that the destruction of their farmhouse by the tornado back in The Wonderful Wizard of Oz has left Uncle Henry in terrible debt. In order to pay it, he has taken out a mortgage on his farm. If he cannot repay his creditors, they will seize the farm. He is not afraid for himself, but both he and his wife, Aunt Em, fear very much for their niece’s future. Dorothy arranges with Princess Ozma to take them to the Land of Oz, where they will be safe. Using the Magic Belt (a tool captured from the jealous Nome King Roquat), Ozma transports them to her throne room. They are given rooms to live in and luxuries to enjoy, including a vast and complex wardrobe. They meet with many of Dorothy’s animal friends, including the Cowardly Lion and Billina the Yellow Hen.
In the underground Nome Kingdom, the desirous Roquat is plotting to seize the Land of Oz. He was greatly embarrassed years ago when Dorothy, Ozma, and their many friends entered his domain and freed the royal family of Ev from imprisonment, As a result, he wants to embarrass them in a similar way. After ordering the expulsion of his General (who will not agree to such an attack) and the death of his Colonel (who also refuses), King Roquat holds counsel with a veteran soldier called Guph. Guph believes that against the many magicians of Oz (the reputation of which has grown in the telling), the Nome Army has no chance alone. He therefore sets out personally to recruit allies.