As you know, trees symbolize people. A tree in dreams and visions symbolizes a human being and a forest or an orchard symbolizes a group of people. Groups of people are usually a nation when it is a huge forest or a church or a congregation when it is a smaller group of trees or an orchard.
Take note that in some cases, one tree can symbolize a group of people like a nation, an institutional church or a denomination, and so forth. For instance, a fig tree is a symbol of the Jewish nation. Even the church is symbolized by a tree in the gospels.
An oak tree symbolizes a person or a ministry with spiritual strength. It speaks of a person or a ministry playing a leading role in the body of Christ. In a natural sense, an oak tree symbolizes a person or a political party or a group of people who are one in motivation.
This tree is very peculiar, it is tall, which speaks of a strong person or an important person with influence, but, it allows “imaginations” inside it, symbolized by the gnome. As we all know, gnomes do not exist. It is fiction (small imaginary people). The tree is among other trees which indicates that this person is part of a group of people (a nation, a church, a political party, etc.), or this group of people are part of a bigger group. I am giving you all the scenarios seeing that I do not know the trigger.
If you had this dream after your daughter told you about the tornado, then this may be connected.
A tornado in dreams and visions speaks of a drastic change in the spiritual atmosphere which causes disturbance and conflict. This causes trials and times of difficulty in the lives of people. A tornado, or a cyclone, or a storm suggests that a person or people suddenly have to deal with people or difficult circumstances caused by people and even by God and sometimes satan.
I am afraid this is all I can tell you about this dream. If the two are connected, it speaks of a person or a group of people with a lot of influence, being led and influenced by imaginary things or people. The red and blue clothes speak of a mixture of conflict and dissension on the one side, and the blue speaks of the glory of God or revelation knowledge. So he or she or they pretend that they act according to God’s will and leading and revelations but they are in fact full of dissension and hate and bitterness. The yellow hat speaks of their minds (thoughts), consumed by jealousy, contempt, and hate.
The gnome standing ready with his hand on the golden knob speaks of this change about to come into fulfillment. The dark scene speaks of evil influences (as well as the enchanted picture or scene). Imaginations will be presented as truth, I suspect.