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Former secretary of state Hillary Clinton greets supporters following an event in Marion, Iowa, on Sunday.T.J. Kirkpatrick/Bloomberg

Iowa is a place where politics unfold on a human scale. Campaigning politicians field spontaneous questions from citizens at town halls, break bread with local party activists in hopes of securing their endorsement and win support vote by vote.

It's a tough dynamic if you're Hillary Clinton. At a rally Thursday in Iowa City, Democratic faithful queued for up to an hour to get into the room. When the former secretary of state went to shake hands with supporters, they were kept behind a waist-high fence and the candidate was surrounded by grim-faced secret-service agents.

Bernie Sanders, her rumpled aging hippie challenger, has no such restrictions. At a town hall last week in Fort Dodge, people came and went as they pleased and the senator from Vermont waded right into the crowd after his speech.

While the circus-like Republican race has sucked up most of the nation's political oxygen, the contest on the Democratic side has often seemed staid – not least because of Ms. Clinton's aura of invincibility. But with just a week to go before this heartland state of 3.1 million holds the first electoral test of the U.S. presidential race, Mr. Sanders has erased her lead in the polls and threatens to deal her an embarrassing defeat.

Iowa's first-in-the-nation status, combined with the folksy nature of the caucus process itself – on voting day, people gather in school gymnasiums and church basements to debate the merits of the candidates before making their picks – mean the locals expect up-close access to the politicians.

"Iowans have gotten used to the idea that before they make up their mind, they want to see the candidate two, three, four, five, six times," says Tom Larkin, a Democratic activist in the Iowa City suburb of Coralville, and supporter of Ms. Clinton. "And if you don't spend the time here in Iowa, you'll never win [the state]."

Far from the stereotype of American politics as cable-news soap opera, this is a place where many voters expect substantive speeches and specifics on policy. At Mr. Sanders's town hall, he gets questions on everything from health-care reform to federal support for small business to term limits for members of Congress. His plain-spoken style, as he rails against big banks and promises universal health care, strikes a chord. Even his appearance – blazer a size too large, mop of messy white hair – telegraphs a casual authenticity that matches his populist message.

"I love his honesty – he's for the people. He's not afraid to stand up against the big meanies," says Amy Houy, 38, sitting in the audience with her partner and step-daughter.

To Mr. Sanders's supporters, Ms. Clinton reads as an establishment politician, prone to compromise and beholden to moneyed interests. Mia Dorothy, 24, describes her as "a flip-flopper." Says 77-year-old Skip Christensen: "She has so many ties to Wall Street."

Still, political observers give Ms. Clinton credit for running a better campaign here than in 2008, when she lost Iowa and her front-runner status to Barack Obama by eight percentage points. Instead of relying mostly on large rallies and advertising as she did last time, Ms. Clinton has toured around in a van nicknamed Scooby and staged smaller-scale events. She has also built up a strong local organization, crucial to getting out the vote on caucus day.

"She learned the lesson from 2008 in terms of the organizational side. She's not comfortable with it, but she understands how it works," says Timothy Hagle, a political science professor at the University of Iowa. "It's like somebody who has to take a required class to graduate that's outside your major: 'I gotta take it, I need to do well, but it's not my favourite.'"

Democratic activists here say that, within months of the 2012 election, Ms. Clinton's campaign was already quietly hiring staff in the state and dispatching representatives to attend local party meetings and fundraisers to build relationships and recruit volunteers. When the race began in earnest last year, Ms. Clinton swiftly opened field offices across the state. Mr. Sanders, by contrast, made less effort to court the local party establishment and took months to get an organization up and running.

"Bernie Sanders had these huge crowds, but he didn't have the organization necessary to capture that. It was just Bernie Sanders and a couple staffers with clipboards," says Tom Henderson, chair of the Polk County Democrats in Des Moines. "The Sanders campaign operates outside the party organization."

Although Mr. Sanders has rectified that recently, and now has staff and volunteers across the state, Ms. Clinton's head start on the ground game could prove crucial in a state where much of the battle depends on getting people out to the caucuses on voting day.

Ms. Clinton has also taken a different tack on gender this time around. Whereas in 2008, she downplayed the issue, it is now central to her campaign.

"You've seen her play up the fact that she's a woman. When she talks about gun violence, for example, she talks about it as a grandmother," says Jennifer Glover Konfrst, a political communications expert at Drake University in Des Moines. "She's using her biography to frame her policy choices."

Several of her ads touch on family themes, showing Ms. Clinton cradling her granddaughter or relating the story of her mother's difficult upbringing. In one spot released last week, Ms. Clinton declares: "I'm going to fight until every little girl in America knows she can grow up to be anything she wants – even president of the United States."

This all makes her more authentic and relatable, Prof. Konfrst says. "The conventional wisdom is that everyone knows her. What she's trying to do now is reintroduce herself to people."

Conversations with voters at the Iowa City rally suggest this is a key part of her appeal. Nearly everyone in the audience, when asked what they like about Ms. Clinton, first cites her capability to do the job, then her ability to finally shatter the country's highest glass ceiling.

"She's very competent. She has all this foreign-policy experience," says librarian Karen Mason, 62. "I also feel very strongly it's high time we had a female president."

Ann Menner, a 21-year-old Pilates instructor, says she is drawn to Ms. Clinton because of her experience and her policy pledges – particularly making university more affordable – and her gender is an added bonus.

"Most women are not voting for her because she's female, but she just understands what's most important to females – female health, females in the workplace, equal pay, family leave during pregnancy or illness," she says.

Ms. Clinton can still win the nomination even if she loses Iowa. But a loss to Mr. Sanders would leave her wounded. And it would be a signal she must find a way to win over the disaffected Democrats who have glommed onto his populist insurgency.

On the ground, she has already adjusted her campaign to reach out to the voters – the young, the economically marginalized – Mr. Sanders is courting. Her rally in Iowa City, a college town of 70,000 in the eastern part of the state, includes a performance by pop singer Demi Lovato, which draws a crowd of more than a thousand mostly millennial voters to a wood-panelled university hall. And when the candidate herself takes the stage, she peppers her speech with references to Mr. Sanders's pet issues.

"How do we get the economy working for everybody, not just those at the top, and raise incomes?" Ms. Clinton asks, before vowing to "take on the big special interests who are always trying to put the wall against the kind of progress we believe in. I'm going to take them on whether they're insurance companies or banks, drug companies or the gun lobby."

It goes the other way, too: At his town hall a few days earlier, Mr. Sanders promises pay equity, one of Ms. Clinton's key issues.

Undecided voters Alison Doak and Caleb Blom, 19-year-old University of Northern Iowa students who made the 90-minute drive to Iowa City to see Ms. Clinton speak, sum up the pros and cons of each candidate as they weigh their options.

"I like that she's a woman and she's really strong and confident. It's really important to get more women representatives. It's 2016. It's time," Ms. Doak says. "I also like how Bernie has been fighting for the same issues since way back in the day."

Mr. Blom says he likes Ms. Clinton's commitment to gun control, but wonders if her e-mail scandal – Ms. Clinton was accused of dodging freedom-of-information laws by using a personal e-mail address and a private server as secretary of state – is a liability.

Still, he says she might be better able to get things done in government than the more radical Mr. Sanders: "He has some good ideas, but I don't know how well his bills would do in Congress – introducing so many new things."

And this scrutiny, Iowans say, is the best part of putting candidates through the crucible of the caucuses: It stress-tests candidates' campaigns, forces them to sharpen their policies and prepares them for the general election.

"Him being in the race has already made her address issues that probably wouldn't have come up – and vice versa," says Mr. Larkin, the Democratic activist. "It's always good to have a contested race. It's fun to run unopposed, but the reality is a race makes you a better candidate because it makes you focus on your issues. And if you have weaknesses, they're exposed."

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