The original book didn't have any explanation (in part, because WWotE never appeared in that scene in the book). But I can definitely address ONE of your theories:

Is it referring that she (Glinda) is more powerful than the Witch? What does she mean?

Possibly.

First of all, in the books, Glinda, the Good Witch of the South was the most powerful of the four witches (and separate from Witch of the North, who greeted Dorothy at the start)

"Who is Glinda?" enquired the Scarecrow.
"The Witch of the South. She is the most powerful of all the Witches, and rules over the Quadlings.

Second, in the film, they combined both Good witches into a single Glinda witch who appeared both in the start and in the end. Presumably, the combined character was as powerful as the most powerful of the two, and thus more powerful than WWotW.

Additionally:

• Most powers of WWotW seem to be in the control over her servants (Winged Monkeys etc...). As such, in a foreign land, she doesn't have that control as her servants aren't there to do her bidding.

• Dorothy is wearing silver ruby slippers - and they seem to be a big source of power.