The Manor can be found in the Halloween district, once yearly for sometime during the real world Halloween. It generally stays for 3 weeks and then disappears until the next year.
If you exit the Halloween Costume Store, you get to the Halloween square. From there you have to enter the graveyard and proceed Past the Kingdom of Fantasy to the Manor. There you will meet the said Witch.If you showdown with her and win, you can get a beautiful dress as a reward. It does not matter how many times you showdown with her unsuccessfully. You can have as many tries as you want. The opportunity does not pass to win. But to actually win, you have to have the clothes on which were specifically demanded by the Witch (either nightlife or black tie clothes). However, this is not enough.
Once you put on the necessary clothes, you have to go to your Jewelry in the Closet and find the necklace in the right picture (You receive it as a reward for unlocking the Graveyard). Put it on. Showdown with the Witch again. Enjoy your new dress! ;)
This is all there is to it.