I view it as the magical realm running alongside, and mirroring, the real world, but inhabiting its own bubble. The magical world has its own popular culture quite distinct from the real world, which is what lead me to select that particular option. While the political issues at play are unique to the fantasy, I find them in essence to reflect and occasionally critique real-world politics.

I read it as 'people are people, magical or not', as the magical characters have a very mundane tendency toward foibles, artifice, corruption, political alliances, and of course positive attributes as well.