I am starting to think the witch isn't actually bad/evil, but I could be wrong. This chapter seems to highlight how she has power, but isn't a mastermind of much.
Just watch this whole thing that happened was an accident caused by either an experiment of her's or she was bullied and her power went out of control. The only reason she didn't do anything about fixing it was because it was quiet now or she was afraid to get scolded after she fixed it all.
Her curse is oddly benevolent for a curse, too. Think about it: everyone's asleep, but they're perfectly preserved and don't age. Their food, clothing, and structures don't age either. Their plants don't die from lack of water, even though it doesn't rain, they don't get sick from exposure... it's very protective of the people who have been cursed.
To top it all off, she put a dragon in front of the place so nobody else could get in. Now while the storybook makes it sound like that's stopping people from rescuing them from the curse, also think about it: nobody can just sneak in and steal all their shit while they're asleep. Everyone's asleep, but they're safe, healthy, and when they wake up, it will be like nothing has happened.
Why? I'm very curious. Especially because she seems so genuinely clumsy and genuinely annoyed that people are moving around when they shouldn't be.