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The plots of the Touhou Project revolve around the strange phenomena that occur in the fictional realm of Gensokyo (幻想郷 Gensōkyō?, literally Illusion Village or Fantasy Village), which ZUN designed with a human village in the grounds of some remote mountain recesses in Japan. Originally, it was simply called "a remote separated land of a human village in an eastern country." Long before the Touhou Project's story begins, there lived many non-humans likeyōkai as well as some humans in the area. After a few humans lost their way into Gensokyo, humans became afraid of approaching this area, although others settled here for the sake of yōkai extermination. However, as time went on, humans developed civilization and multiplied in number, and thus the yōkai became distressed about how this would affect the balance between humans and yōkai. Thus, 500 years before The Embodiment of Scarlet Devil (EoSD), the yōkai sage Yukari Yakumo developed the "boundary of phantasm and substance," which was favored by the yōkai and protected the balance. This was called the "Yōkai Expansion Project" and made Gensokyo a phantasmal world that automatically called out to the weakened yōkai of the outside world. Other things that disappear from the outside world, like extinct animals, lost tools, and architecture, also became abundant in Gensokyo. Since Gensokyo was a plot of land in Japan that was separated by a barrier, it is Japan that is immediately outside of this barrier.
As a result of the seal, Gensokyo became inaccessible from the outside world, and similarly, those in Gensokyo were unable to leave. Gensokyo's existence could not be confirmed from the outside world, nor could the outside world be confirmed within Gensokyo. As a result, the isolated community developed its own civilization, different from that of the outside world. Although separated by a barrier, it is a bordering world to its outside, as opposed to being in a parallel universe. There are no seas in Gensokyo, since it is an inland mountain. In Gensokyo, there are few humans, and various kinds of yōkai. Some species include magicians, beasts, therianthropies, vampires, bōrei, tengu, kappa, and yōkai (a kind of miscellaneous group). There are others species that could be yōkai depending on definition, like fairies, spirits, yūrei, onryō, poltergeists, hermits, oni, and gods.
In present Gensokyo, which is presented in all Touhou Project games since EoSD, as opposed to the outside world where unscientific phenomena were dismissed as "superstition" by the time of the Meiji era, magical and spiritual qualities prevail. The only known gateway from the outside world into Gensokyo is the Hakurei Shrine on the border of Gensokyo. The spell card rules were also established to keep up the relationship between humans and yōkai in a mock style, which was necessary for the preservation of the balance of Gensokyo. The "Great Hakurei Barrier," managed by Hakurei Miko, was constructed several decades before EoSD, which is described as a "barrier of common sense," and is thus a strong logical barrier that not even yōkai can pass through. The yōkai were at first against its construction, but then gradually understood its usefulness.
