From Muppet Wiki

Munchkinland is a miniature city populated by the Munchkins in The Muppets' Wizard of Oz. It is the first land encountered by Dorothy Gale when she arrives on Oz, and was formerly the domain of Wicked Witch of the East. Small, blue, mushroom-esque thatch roofed cottages, some with satellite dishes, are spread out in a charming arrangement against green valleys and lush mountains. Prominent landmarks include the cheese factory, billboards for the Wicked Witch, and the Munchkinland Statue.