This popular and well-documented reading sees The Wizard of Oz as being about the collapse of the Populist Movement in the United States at the turn of the twentieth century. In this scenario, Dorothy represents the common citizen, the Tin Man is the industrial worker, the Scarecrow is a stand-in for farmers, and the Cowardly Lion is politician William Jennings Bryan (seen by many at the time as being all talk and no action). They travel along the Yellow Brick Road (the gold standard) to see the Wizard, who could represent President Grover Cleveland or William McKinley. (“Oz” itself is the abbreviation for ounce, which is the standard for measuring gold. The green of the Emerald City represents the dollar.) The Wicked Witch of the East represents bankers, and the Wicked Witch of the West — who, remember, gets killed by water — is drought. This theory, first put forth in the sixties by a high-school teacher named Henry Littlefield (whose original essay you can read here), has since been debunked, yet still maintains a hold over many.*
Religious Allegory
Over the decades, The Wizard of Oz has been seen by many Christians (and used often in sermons — see here for one example) as an allegory of faith. Consider: The Yellow Brick Road is the path to enlightenment, with the characters encountering a variety of emblems of sin and temptation along the way toward the Emerald City, which is a kind of a heaven. (In another reading, Oz itself can be heaven.) Also, the Wicked Witch is killed with water, suggesting baptism. (It also helps that there are a number of resonances between Baum’s story and John Bunyan’s influential spiritual tale The Pilgrim’s Progress.)
Atheist Allegory
Hilariously, this theory I.D.'s almost all the same elements as the religious allegory, but then interprets them in the opposite direction — that is, God, a.k.a. the Wizard, isn’t real, there’s a mortal behind the curtain, and all that