Our story takes place in a region of Japan known as Kasei, which is special in that it is one of the largest concentration of fusions--genetic hybrids of humans and Pokemon. It has become a cultural melting pot of many different languages, businesses and of course races--as it is one of the few places such fusions are culturally accepted. Taking place in the present day, it's residents must deal with every day problems such as racial tensions, politics, looking another work week in the eye--and above all, the Pokemon League.
The founding of Kasei as a haven for those of the fused nature started just around the time when World War 2 was taking place, when the machines of war ravaged across Europe and Asia. During this time Kasei faced the Team Rocket uprising, led by Giovanni. This conflict was one of the largest of it's kind for that area, and hinged heavily on support by fusions on either side. Eventually, TR was forced to surrender following their leader's assassination and the overall weakening of the group. Rebuilding the country and region was a slow process, with some areas today still bearing the scars and monuments of war.
Millions in tourism revenue turned it's towns and villages into cities over the next few decades, cities emerging in their wake. Businesses sprang up and flocked to the region, along with giant corporations such as Sylph .Co, specializing in research and development of Pokemon and related technologies. Despite the prosperity of the area, it is not without consequence--criminal groups and organized crime native to Japan are ever present, and there are rumblings of Team Rocket renewing itself through new upstarts. New government organizations are drafted to deal with the concentration of trainer criminals in the area, such as PALS but like any new organization, who can say what they will change.
(Note, most of this info is old, and is subject to change.)
The old creation myth.