A very popular effect these days is the miniaturization of real life shots called Shift/Slant. It is a simple Optical effect using our brain's own physiological depth of field process to make us think we're looking at a tiny miniature toy world, rather than the real one. Through the process I'll explain how each step helps to mimic the look of a miniature animated diorama image.

Step 1 - Selecting or Shooting Appropriate Footage

This effect will work better on some shots than others. Preferably you want a shot that is taken from above, looking down on a large area.  It should have static architecture around the top and bottom, and movement should be limited to the center of the shot. Think of a shot that replicates you looking down into a small diorama. A great example would be the intro shots from Mister Rogers' Neighborhood. 

Step 2 - Retime The First Layer

Once you have your shot on your computer do the basics: Create a new Event (Option-N), import the clip (Shift-Command-I), create a new project (Command-N), and drop the clip into the new Project (E). The first thing we want to do is retime the clip to make it look more toy-like. 

Click on the clip, Command-R brings up the Retime bar, then click the Retime bar menu arrow and choose Fast > 4X. Adjust as needed by dragging the retiming handle at the end of the clip. 

The exact timing will depend on the specific clip you use. Make it play faster (but not too fast), just enough to make it surreal, similar to how the movements of model trains are not exactly like those of real trains.

Step 3 - Color Correction

Since toys and miniatures are often painted brighter colors than those of real life objects, we want to mimic this look. This next step over-saturates the image to make the colors more surreal.  With the clip selected in the Timeline, open the Color Board (Command-6). In the Saturation tab, pull the global slider on the left all the way up. If the clip is particularly dull, pull the Shadows, Midtones and Highlights sliders up as desired.

Step 4 - Defocusing

When we view a miniature diorama our eyes focus intensely on the center of the scene, causing some depth of field type of blurring. We need to mimic this. With our clip still selected, open the Effects browser (Command-5), go to the Blur category and double-click (or drag-and-drop) the Gaussian effect which applies it to our clip. Begin with setting Amount to 15, Horizontal and Vertical both to 100. We want only enough blur to be surreal, not too much.

Step 5 - Creating The Second Layer

We did all of our adjustments first, as we need most of them to be the exact same on both copies of our clip. Now we can Option-drag the clip from the Primary Storyline up and out of the Storyline. This creates a duplicate that is now a Connected clip above the original.  

Highlight it in the Timeline and in the Inspector, delete the Gaussian effect but leave everything else as is. This Connected clip above the first one will be the section of the animated diorama our eyes are focusing on. Our next step then is to apply a mask.

Step 6 - Matte The Second Layer

In the Effects browser, from the Keying category, add the Mask effect. With the effect highlighted in the Inspector, adjust the Viewer controls and set the 4 corners to cover the center third of the image, with the left and right sides of the mask just barely inside the frame. 

Then, adjust the position to focus on your main action as needed. Adjust the Feather plus or minus 15, Roundness to 50. This completes the two-layer effect: one being what our eyes would focus on, with the periphery that is unfocused, with toy-like colors and animated-like movement.

Conclusion

It's really that simple to make the right real life shot look as if it were an animated toy diorama with the right original clip. As a challenge, attempt creating this on your own in Motion as an FCP X effect template and publish the appropriate parameters. If doing this in Motion, use a very slight stutter effect on it to make it look more animated. Then share it with the world!