Oona Goosepimple lives in an impossibly large mansion (with a hedge maze growing in it!) with an eccentric family that takes the surreal (or supernatural) for granted. Her stage magician uncle was shrunk to the size of a mouse when he lost a contest, and while he accepts being mouse-sized as nothing more than a commonplace inconvenience, he loves to grumble about losing a contest. Her grandmother is a well-meaning cross between a witch and Mother Goose, with magical potions that usually occur in the form of delicious homebaked cookies. The family room chair can move its armrests like arms and occasionally enjoys reading a book while smoking a cigar (though how it can smoke a cigar is never shown). Just behind the burning logs of the family room hearth is a secret passageway that leads into the bizarre wing of the house occupied by the Yoyos, hostile imps with bizarre magical items (such as a giant gumball machine that tries to imprison Nancy in one story) strewn about a flat room that seems to extend infinitely in all directions and, at least once, filled up with snow despite being indoors.
Nancy's misadventures with Oona often end with her waking up from an apparent dream, only to find something which proves the dream had actually occurred. After reading all the Oona tales, the reader is left with the impression that Oona uses her powers to convince Nancy her misadventures took place in a dream as an act of kindness.
Oona Goosepimple's powers are based in an encyclopedic knowledge of her weird world and an unconscious ability to influence reality rather than any sort of magical spellcasting; for example, when Nancy received an invitation to a costume party held by Oona, she found herself sewing a costume and putting it on without realizing it despite her Aunt Fritzi's efforts to point it out to her. Oona's primary powers are based in her access to special items, such as a flying broom or a funhouse mirror that can change a person's shape. Her happily surreal world lays on the borderline between comic book reality manipulation and comic book magic, having far more in common with the high energy randomness of dreams and her own irresistable enjoyment of life than anything else.
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