P.J. soon discovers that these nameless children were left there by the wishing star, and despite the star's dubious skills, have been wishing for a leader ever since. It's unclear why P.J. was chosen as their messiah, er, leader, but somehow the kids just know by looking at her that she's the one.
Hey, she seems pretty OK, let's worship her.
Let's stop and make it clear that even the people writing this monstrosity couldn't have given less of a shit about it. At one point, P.J. performs magic without meaning to and offers as an aside, "I wonder how I'm doing that?" When P.J. appears out of nowhere to a troubled kid and he wants to know where she came from, her horse tells him, "Just go with it, kiddo, it takes too long to explain."
Seriously, kid, just shut the hell up and watch your movie. Mommy needs her schnapps.
Anyway, the villains of the story, who are inserted almost as an afterthought, are the only adults in Twinkle Town, and they really don't like what P.J. has done with the place. In case you weren't sure they were the bad guys, they carry a bag of filth around with them wherever they go.
Yeah, we were being literal.
Having discovered a "cure" for all the love and happiness in Twinkle Town, the two villains manage to turn all of P.J.'s followers against her. P.J. begins to grow faint and fade away. She's informed by the horrible wishing star that her very existence depends on how much love the children give her. So, unless she can manage to bring the children back under her thumb, P.J. will die. And unless they follow P.J. adoringly, the kids better get used to a dark existence trapped in Twinkle Town forever.
Wait, was this toy just a front for a cult? All the profits went to fund some compound somewhere, didn't they?