The plot would have been over before it began if the mayor (who is not in any way supportive of Mavilda's abuse) took more than a passing glance at the children before handing his huge bags of money to Mavilda.
Also, Judy could easily have reported Mavilda to the mayor as soon as Mavilda lost the money in that poker game - it's not like Mavilda could have hidden the fact that she hadn't bought any new clothes or toys like the mayor told her to do upon any actual inspection. The film does make a slight effort to justify this by having Mavilda threaten to evict Judy and her children if word of the abuse gets out... never mind that Mavilda will have no authority to do so if she gets fired, as she almost certainly would.
The orphan explaining how he likes to pretend the tree in the backyard is hugging him when he's sad. Though unintentional, Judy's heavy-lidded oh-you've-got-to-be-kidding-me reaction is what really sells it.
What little legitimate emotion shown by Judy after being reunited with her [thought then to be dead] daughter is ruined by (to quote The Nostalgia Critic) "The creepy Coke Santa ad" showing up for a couple of seconds right in the middle of the scene.
The way Pappy calls for his supposedly dead sister. "Lily."
The fact that one of the kids is named Pappy, which doesn't call to mind a kid as much as an old man (e.g. Pappy from the Popeye cartoons).
So Bad, It's Good: Some people have referred to this as The Room of Christmas specials, what with everything being so badly done that it's hilarious.
Special Effects Failure: The movie was released in 1991, but considering how awful its production values are, it could easily pass as something from the 1960s.
Uncanny Valley: The movie spends its entire running time jumping into and out of the valley, especially with the blinking. Many of the movie's scenes show absolutely no movement when the characters are on screen, except for the rather unsettling blinking. On top of that are the eyes - they attempt to go for irises rather than just black dots, but they don't actually use any color for them. They're black corneas and gray irises, which are just unnerving.