Right so Ozpin is supposed to be the Wizard Oz
And Glynda is The good witch.
What about everyone else?
I believe Ruby represents Dorothy as both are the protagonists, Dorothy has her read slippers and Ruby has her red cloak.
Blake is the cowardly lion, The lion is always afraid and Blake is always running, (usually people run out of fear)
This is where people could help me explain this a bit.
Weiss could be the Tinman. The Tinman wanted a heart. Weiss defiantly has emotion issues as heard in the "White Trailer" during "Mirror Mirror"
And Yang could be The Scarecrow as Yang needs a brain metaphorically. She always rushes into a fight without thinking and letting her emotions overwhelm her. This is clear in episode 11, she rushes in without thinking and loses her arm.
Of course they are already based off of other fairy tale character but they could be based off of more than one.
If anybody agrees/disagrees say son in the comments, and if you have anymore evidence feel free to expand the theory.