The Emperor's New Clothes
Drag comedies are rarely convincing; their usual approach is that we have to suspend disbelief and just accept that the the protagonist's disguise will fool the other characters even though it doesn't fool us.
Victor/Victoria came out the same year as Tootsie, and both films adopt a certain level of realism not usually found in the genre. In Tootsie, Dustin Hoffman turned out to be semi-convincing as a woman. (As Roger Ebert put it, he looked like "certain actual women who look like drag queens.") In V/V, by contrast, Julie Andrews never looks remotely like a man--yet the film handles this fact by basically acknowledging it and incorporating it into the story.
Note that Marchand isn't fooled for a second--he senses immediately that she can't possibly be a man. Of course because everyone insists she is, he isn't absolutely sure. But that just goes to reinforce the idea that people accept her ruse simply because they can't fathom the possibility that a woman would do something like that. That's why I think the story is a bit like "The Emperor's New Clothes," the way conformity and conventionality cause people to deny obvious truths in front of their own eyes.