Toon is a state of matters and beings that can be obtained through spilling magical Paint on them.
To ensure that the Devils wouldn't break the permanent ceasefire instaured in Toontown, the High Council cast a powerful spell on the area that would turn anything that entered it into invulnerable (to anything but Thinner) Toons. A similar method was used by Yen Sid during the creation of the Wasteland.
There are, however, two flaws to the concept: a Toon-ified being can be erased from existence entirely using Thinner, or can be turned into stone if his paint is dragged away. Turning back a toon into a "normal" person is a very difficult task.