Answer:
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You are testing for the presence of starch: Iodine dissolved in an aqueous solution of potassium iodide - reacts with starch producing a deep blue-black color. This reaction is the result of the formation of polyiodide chains from the reaction of starch and iodine.
Answer: If it comes closer, make yourself look larger and make lots of noise. If it still continues to come closer then spray (or throw) water at it. A raccoon that is too aggressive or too tame may be sick or injured.