Muggles don't exist
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Muggles don't exist. The world belongs to two types of magical beings: wizards/witches and magical creatures. Two different races, each on the same land, sharing the same resources. At one point, they were able to coexist harmoniously. Freely conversing with one another, sharing equal rights, and just being at peace with one another. Easily the perfect life. Unfortunately, nothing in the world can stay perfect. A fact only proven as wizards began to notice the power imbalance between them and their ‘friends’.
Harry Potter finds himself growing up in a world where pureblood creatures have almost all the rights where as pureblood wizards/witches have none. As a halfblood (veela-human), his life isn't hell, but it isn't easy. Draco Malfoy, a pureblood veela, shifts that balance when he pushes his way into Harry's life.