I'm planning a modern urban fantasy with mythological beings evolving 10,000 years ago on Eurasian/African Continent. But, I'm running into issues merging my were-hyenas with local myths. Should I stick with original local lore, problematic as it may be (racist) or is it better to make a completely new Earth with a new history? I'm leery of creating an alternate Earth (so much work), but I really don't want to offend the cultures that already exist, if I have POC+shifter, etc.
If you’re worried about causing offense, then you have two real options:
Put out your feelers for sensitivity readers or talk to people in that minority group, aka: Do your research
If the lore you intend to use is known for its racial issues, then it would be best to avoid. You don’t want to pick up something you know is an issue. If you are uncertain, talk to others. Do your research.
There is a huge benefit to creating your own world, freeing it of a lot of baggage, but just because you create an alternate Earth doesn’t mean you will be freed from all of these issues, either.
An important thing to keep in mind is this: just because writing inclusively is difficult doesn’t mean you shouldn’t do it. It just means that you need to make sure and get it right. Here a few resources to get you started:
How to Authentically Write Diversity