Like other oversized animal characters in the Oz books, Percy has a history that involves a certain amount of magic. When Jonathan Manley, better known as Jam, plans to take an expedition using the kite he just built, he takes a few animals from his father's laboratory. When the wind blows him to Oz, he arrives there in the company of two guinea pigs and a white rat, all of whom begin talking in the fairyland. The guinea pigs are named Pinny and Gig, and have the annoying cartoon twin habit of finishing each others' sentences. They are written out pretty soon, as Jam leaves them with a Gillikin family. Percy the Rat, however, remains Jam's companion throughout his adventure, and a magic muffin from the Hidden Valley makes him grow to ten times his original size (although I would assume that's approximate, not exact). The rat is quite vocal and active, and often finds a way out of dangerous situations. Rachel, who had experience as a biologist, said she put in a rat character largely because they're intelligent animals, and Percy is indeed quite clever. I think it's more his attitude and speech patterns that make people dislike him.
When Eric Shanower illustrated Rachel's other Oz book, The Wicked Witch of Oz, he hit on another reason why people weren't too keen on Percy, which is the way Dirk Gringhuis drew him. In order to improve on this, Eric used a real rat as a model, and did indeed come up with a more attractive depiction. It also helps that there's a little more variety to Percy's slang in the text, so he comes across as a better character overall. Rachel also used him as the main character in her short story "Percy and the Shrinking Violet." For the most part, Percy doesn't appear in stories other than those written by Rachel herself, but Ray Powell apparently ignored the copyright and gave him a small but significant role in The Raggedys in Oz. In order to stir up some excitement, he frees Ruggedo from his enchantment, and is punished by being sent back to the United States to live as an ordinary rat. The version of Raggedys I read was a slightly edited one, in which Percy is forgiven, which really strikes me as more appropriate for an Oz story anyway. But the fact that Powell wanted to get rid of Percy in the first place just goes to show how unpopular he is with some Oz fans. On the other hand, he's fairly well-liked by others. I can't say I mind him, but he's not a favorite of mine either.