"Why should I do this for you?" asked Oz.And that was that. Dorothy was famous for killing the Wicked Witch of the East. It was, as she said, an accident.
"Because you are strong and I am weak; because you are a Great Wizard and I am only a little girl."
"But you were strong enough to kill the Wicked Witch of the East," said Oz.
"That just happened," returned Dorothy simply; "I could not help it."
"Well," said the Head, "I will give you my answer. You have no right to expect me to send you back to Kansas unless you do something for me in return. In this country everyone must pay for everything he gets. If you wish me to use my magic power to send you home again you must do something for me first. Help me and I will help you."
"What must I do?" asked the girl.
"Kill the Wicked Witch of the West," answered Oz.
"But I cannot!" exclaimed Dorothy, greatly surprised.
"You killed the Witch of the East and you wear the silver shoes, which bear a powerful charm. There is now but one Wicked Witch left in all this land, and when you can tell me she is dead I will send you back to Kansas—but not before."
As a result, the Wicked Witch of the East technically doesn't appear in the Famous Forty Oz books. However, people remember her.
The Munchkin Country appears to be flourishing when Dorothy arrives. The Munchkins she meets seem to be in good health. Whatever bondage the Wicked Witch of the East had, she made sure her people were taken care of. In The Tin Woodman of Oz, Ku-Klip mentions that he went to see her after he cut off a finger and she glued it back on the Meat Glue he later took for himself after she died.
However, she wasn't really a benevolent Witch. Let's not forget that getting out of the Munchkin Country was difficult. The yellow brick road was broken in three places (though I offered an explanation for one of them in my Lion story), and let's not forget that there's a deadly poppy field in the Munchkin Country. Basically, you could live happily under the Wicked Witch of the East, as long as you did what she wanted.
The Wicked Witch of the East appeared to have a humble dwelling. In The Tin Woodman of Oz, instead of a castle or mansion, she appears to have a standard house and one servant to do the housework. This, at the time it's focused on, was Nimmie Amee. In The Wonderful Wizard of Oz, it's different and Nimmie lived with her mother who sold two sheep and cow to the Wicked Witch to cast a spell on a certain woodcutter. Most Oz fans typically go with Baum's revised story in Tin Woodman as it's simpler. (Apparently, his memory had rusted as well.)
The Wicked Witch of the East was certainly bloody, because instead of stopping Nick Chopper from loving Nimmie Amee by instantly transforming him into metal (or freezing his heart, or turning him into another form), she instead enchants his axe so it will cut off parts of his body. We know he gets them replaced by tin prosthetics, but in Tin Woodman, it says the Wicked Witch actually hacked his torso into pieces herself. Later, she does the same thing to Captain Fyter.
Tin Woodman also reveals what the Wicked Witch was doing out where Dorothy's house fell (it doesn't seem to be a heavily populated area). Ku-Klip says: "The old Witch was so provoked at the girl's tears that she beat Nimmie Amee with her crooked stick and then hobbled away to gather some magic herbs, with which she intended to transform the girl into an old hag, so that no one would again love her or care to marry her. It was while she was away on this errand that Dorothy's house fell on the Wicked Witch, and she turned to dust and blew away."
While it seems the Munchkins were able to live comfortably as long as they didn't defy the Wicked Witch, the Wicked Witch of the West somehow enslaved a pack of wolves, a swarm of bees, a murder of crows, as well as somehow acquiring Quelala's Golden Cap to command the Winged Monkeys. We are also told that she had only one eye, but it was as powerful as a telescope, and she could see great distances away. (Adaptations have played with this: The Muppets' Wizard of Oz has a magic eye, while the MGM film gave her a crystal ball instead.)
When the Winkies fail her, we are told she "beat them well with a strap." She also seems to have the Winkies actively working for her, though Baum never tells us what exactly this work is. (The 1987 Oz anime television series revealed they were building a fortress.) Perhaps she was working on a way to defy the Wizard. Some fans also have the idea that she made no rain fall in her land, so maybe she had them work a machine of some sort that kept the rain away. Or if she did it with magic, perhaps they had to work hard to irrigate their crops.
The Wicked Witch at one point used the Golden Cap to drive the Wizard out of the Winkie Country. Perhaps he was trying to conquer her, or that was where he was based before he began construction on the Emerald City. She also conquered the Winkies with the cap, suggesting that she has either had the Cap a long time or her reign wasn't so recent.
Denslow gave the Witch an umbrella that Baum confirms in his text when she hits Toto with it after she has Dorothy captured. She doesn't seem to stray far from her home, though. Baum also tells us that she's afraid of the dark.
However horrible these Wicked Witches were, everyone in Oz could breathe a sigh of relief when they were finally gone.