The War with the Fnools
The Fnools are invaders in the guise of two-foot-tall human beings. They take on the guise of Volkswagen mechanics, ethnic circus performers, and other similar business practitioners. A discovery is made by a Fnool that if one of their kind partakes in an activity associated with growing older (in this case tobacco and alcohol), the Fnool will gain two feet in height. The knowledge is spread, and as a result, the Fnools become indistinguishable from human beings, albeit temporarily, before one engages in sex and makes them inhumanly tall.
Dick said of the story:
Well, once again we are invaded. And, humiliatingly, by a lifeform which is absurd. My colleague Tim Powers once said that Martians could invade us simply by putting on funny hats, and we'd never notice. It's a sort of low-budget invasion. I guess we're at the point where we can be amused by the idea of Earth being invaded. (And this is when they really zap you.)