It pretty much took a viewing of one of the videos of her live show in which Colleen starts singing "Defying Gravity" (from Wicked) and then transforms into Miranda halfway to convince me. All she does is put on sweats and a button-down shirt (buttoned up to the collar), puts some bobby pins into her hair, and applies red lipstick beyond the confines of her lips.
I have by no means watched the entire Miranda oeuvre -- especially because there are so many guest appearances on other YouTube personalities' vlogs -- but I've watched more than 20 so far, and I am still amazed at Colleen's transformation. Obviously there's more to it than hair and makeup. Something about the tilt of her head, a slouch, excessive eyebrow wiggling and bugged-out eyes and a near-perpetual grimace. Miranda's videos are entertaining even without taking the acting into account, yet I believe that there is a certain amount of trolling involved, which makes it even more fun on a meta level. There are viewers who believe Miranda is a real person, not a character.