General World History

The general premise of Iroe is that it is our world in the far distant future. In the less far distant future, after the 8th world war, the world is in cataclysmic ruin. In an attempt to save humanity, many of the still-living humans fled to "LifeBiomes" which were intended to preserve the human race until the radiation and rampant ruin had receded and the earth became generally livable.

Some radiation leaked into even the best protected LifeBiomes and the humans inside evolved (with the help of the radiation, which sped up the process considerably) to match their circumstances. Thus the LifeBiome in the sky (which was in orbit, similar to the ISS, but had partial fake-gravity) evolved Elves, which weren't as strong due to the lessened gravity and were taller for the same reason and the LifeBiome buried underground evolved Dwarves as it expanded and mined out from the confines of the original LifeBiome.

Additionally, many humans still on the surface of the planet survived but as the radiation was drastically stronger on the surface, the evolution effects were more drastic, leading to Beastfolk, for example.

Additionally, after the cataclysm, the rules of reality underwent some changes. Magic became a force; in fact, the majority of the radiation energy on the planet was mysteriously converted to magical energy (which lacked the murderous power of radiation), permitting a significantly better survival rate on the surface and also explains why mages became a thing. 

It should be noted that this setting is concerned with things sounding plausible over actually being plausible. Like, I know that's not how radiation works, but it sounds plausible and lets us have this cool setting. Same goes for everything else here.