The Backyardigans honestly believe it was still doing it during the contest. After the first two rounds, it decided to abandon him before the third, therefore setting him up to knowingly win it on his own after unknowingly doing so on the last two.
Uniqua is an alienCurly antenna? Spotted skin while the others are a solid colour? Not a mammal, bird, reptile, or amphibian? She's probably an alien.
The Backyardigans actually are reality makersAllow me to elaborate, the 5 members of the crew actually have a limited reality creation skills, while using their imaginations, they are able to actually create a pocket dimension to play in, explaining the fact that everyone percieves the world in the same way.
Austin has a puppyOn at least two occasions, the cast were joined by a dog-like companion (the dinosaur puppy, the Mars rover) - each time, Austin was most closely associated with the companion. This would make sense if he brought his new puppy over to play with his friends and they incorporated him into their scenarios.
The Backyardigans aren't really Funny AnimalsThey're actually human, but imagine themselves as animals for fun. That's why the whole universe is in bright colours, even before the imagination spots begin.
The Backyardigans are Time LordsAnd they get to their adventures on their TARDIS.