Thank you everyone for your comments, I'm very pleased that you like it
It's half one in the morning here and I'm exhausted and am about to go to bed, but as people seem curious I wanted to let you know my method.
Materials: DYLON fabric paint (though actually I mixed in a bit of Plaid So Soft sometimes when I just happened to have the right colour in that and not in DYLON); black sharpie marker, brown sharpie marker, black t-shirt from thift store. Also, freezer paper for the first step.
Also, if you want to recreate this, you'll need good-quality, small brushes. It makes a difference.
First I found the picture from the film with google image searches. I then zoomed to the size I wanted, and traced the outline of the whole thing onto freezer paper, so I could create a paint base to sketch onto. I cut it out, ironed it onto the t-shirt and then sponged white paint (I used DYLON fabric paint) into the stencil, let it dry, and ironed the paint to set. I can't sketch onto black, stretchy fabric, so I had to create a base that I could use a pencil on to draw in the figures. So I used a mechanical pencil to draw the figures into the white shape, looking back to the image for reference. (the white background approach is why you can see I've painted in the black space around the tree branches on the right)
When I'd finished drawing the outline of each figure/object, I built up the paint (again, DYLON) layer by layer - large flat areas first, then adding in things like shading in later layers, finally adding in tiny details like the flower, the whiskers, the pupils of the eyes. Each layer had to dry and then be set with the iron before I could do the next layer. I really recommend this, because if you get impatient you can ruin it.
I then tackled the branch itself, which again I did in layers, and did a lot of colour blending. I used to do oil painting as a teenager and the blending technique is pretty much the same, but your window of opportunity before the paint sets is shorter. Then I let it dry, etc etc. Then on top of that, I took a very thin brush and painted in moss and so on; let it dry, then set with an iron.
Finally, I used a sharpie marker on top of the paint to add in brown bark-markings to the branch, and to outline the figures so that they looked more distinct and cartoonish. It's not exactly accurate - the littlest girl's body sort of disappears awkwardly; she's in a weird position and I had a lot of trouble drawing her body. The 'hook' branch on the right is also a bit awkward, and the wrong colour; again, I had a lot of trouble with that. I also think I should have made the skintone of the girls a bit darker. But it isn't too bad.
The totoro on the back was much easier, obviously!
It took many days in total, a bit under 2 weeks, because there is a lot of waiting between layers. I did it this way because I wanted to try something a bit more ambitious than plain stencilling, which I also do a bit of, and to go back to painting. I used to do oil painting, but it's very messy and expensive, and there are only so many uses for an oil painting. So I thought if I do painting on a t-shirt, I'd at least be able to do something with it afterwards.
Also, my trouble is that I can do very detailed, small-scale, accurate copies of 2-dimensional things that I see, but I find larger scale things, and especially transferring something 3d into 2d form, very difficult. Also, I don't really have a very creative, original mind, so painting is not really the art for me. I do things like embroidery, stencilling, etc, where you are expected to copy an image. Or painting a t-shirt, like this.
I wish now I'd taken some in-progress shots. I'm working on a frida kahlo t-shirt right at the moment, so I will go and take some photos of it now before it's too late.
Sorry, just realised how long this post is. I'm very tired and a bit incoherent. If you have any other questions, I'll do my best to answer them