I'm not sure how these got started, except that A (age 11) has been making them like crazy for the younger girls, and they are all the rage in our house right now. I would complain about the waste of toilet paper (a precious commodity in a household of eight), except the number of craft hours they've put into the project has been more than worth the loss of a roll or two of Charmin.
A, was good enough to demonstrate her technique for me. The Waldorf like dolls are very simple to make.
Start with a longish piece of toilet paper - five or six squares.
Fold it in half, long sides together.
Twist five or six inches worth, tightly at the top...
...and tie it into a knot, being careful not to tear it loose.
The knot will become the dolls head. The bit above the knot will be the hair, and the bit below the knot will be the skirt. Figure out how long you would like the skirt to be...
Fluff out the skirt, and washable markers to add details...
...to bring out the personality of each doll.
It's great to be a homeschooler.