Ruth Plumly Thompson pretty much ignored the statements about there being no dogs in Oz as she did most such generalizations. Dogs show up pretty often in her Oz, and she also introduced a canine community in Enchanted Island. It's called Dog Wood, and is located in the eastern part of the Winkie Country. The trees are all dogwood, and each one has a doghouse under it. The dogs living there belong to many different breeds, and their ruler is King Chow, who demands presents from all visitors. He wanted to keep David Perry as a pet, but he and Humpty the camel ran out of there before the canines could catch them.
There's also a dog-themed place in Gina Wickwar's Toto of Oz, although here it's the punitive Dog Pound. This place, ruled by humans named Rex and Queenie with help from the dog catcher Ketchum, kept all the dogs they could catch as prisoners. The rule was that a human could pay a fine to release a dog, but hardly anybody knew where Dog Pound was or could afford the fines. Sonny Burns was able to use the money generated by the Gladstone the Guinea Pig to release all of the dogs, but perhaps the fact that so many of them had been captured was why Baum thought dogs were so rare in Oz. Finally, a community of dogs plays a role in Richard Capwell's Red Gorilla, and another one is mentioned in Ron Baxley Jr.'s Talking City.