We have to admit that we have a hard time analyzing these two characters. Yackle and the Dwarf are hands-down the two most mysterious characters in the book. We still don't know what's up with them entirely, especially Yackle. The dwarf, at least, explains himself:
"I am the guardian of the [Grimmerie], and I was brought to this dreaded, forsaken land to watch over the book's history." (5.8.18)
Unlike the sometimes chatty dwarf, Yackle has almost no dialogue or scenes in the book, and we never know exactly what's going on with her. She's like this magical, sinister figure who haunts Elphaba for some unknown purpose. At least the dwarf is there to protect "the book," though this explanation really doesn't account for his actions at the Philosophy Club and his dangerous and riot-inducing Clock show. Is he just someone who likes stirring up trouble, or do his actions have a deeper meaning? It's really hard to tell. As for Yackle, the dwarf describes her as the opposite of a "guardian angel" (5.8.26). She's like Elphaba's personal guardian, "fiend," a sort of anti-fairy godmother.
Yackle certainly has a lot of careers, from sex-club manager to nun to prophet to character in the Grimmerie (the curiously named "Yackle Snarling" (220.127.116.11)). She prompts some questions about the Other World – is it really magical? And Yackle always pops up in Elphaba's life (often at the periphery) at turning points. She pretty much "arranges" Nessa's deformity by selling Nanny those pills, she gives Elphaba her broom at the nunnery, etc. We never fully learn if Yackle's agenda is for good or evil. But Elphaba's encounters with Yackle usually result in her being pushed closer and closer to her destiny as the Wicked Witch.