Fans of Harry Potter; please explain something to me.

[dubiousbystander]

As wizards have access to true precognition and true divination, they showed in The Crimes of Grindelwald that awareness of the coming dropping of atom bombs was a reason for them to fear Muggles.

[Cyrus The Great]

There are apparently a few Muggles in high places who know of the Wizarding World. I remember the Minister of Magic saying that he would have to inform the British Prime Minister about something.

[dubiousbystander]

I found that they are one planet. Wizards can disguise the entry to their own places, they can have suitcases that you can walk into and find an entire enormous pocket of habitats for magical creatures. They can make Muggles automatically avoid areas, etc etc etc. Muggles can't use magic. Muggles can be affected by magic.

[Darth Reaper]

I wasn't quite sure where to put this since it can apply to the books and the movies alike, so here it is.

Here's my question. When people talk about Harry Potter, they often refer to the Wizarding World and the Muggle World. Is this meant figuratively or literally? Do the stories take place on Earth, but away from the eyes of Muggles, or are the Wizarding World and the Muggle World literally two different places?