This is a background history for a series of one-shots I have planned. I'm posting it because I am extremely busy with life and am not able to write often, so if anyone would like to write a story based on this history, you're welcome to it. Just be sure to give credit where it's due. And on that note, I do not own Harry Potter; it is the property of JK Rowling.
The International Statute of Secrecy went into effect in 1692. According to the Harry Potter Wiki, many magical families had already taken steps to hide themselves from muggles for 250 years. However, the witch hunting was mostly constrained to Europe and primarily European-settled areas (future US, Australia, South Africa). However, many if not most other cultures had an amicable relationship with their magical communities (the Islamic kingdoms, such as the Ottoman Empire, viewed magical acts as miracles; North American Indian tribes' magic practitioners were often respected shamans). However, the conquest of the Aztec Empire and the Incan Empire by Spanish wizards in service of the Church led to a muggle backlash against wizards across the spheres of influence of those empires. Similarly, the hated Qing dynasty in China was begun by wizards who had overthrown the Ming dynasty, again leading to a muggle backlash. Therefore, in these places, as in Europe and European-colonized areas, wizards enthusiastically adopted the Statute of Secrecy while the rest of the world did so in a rather lackluster manner. For several centuries, wizards in the Ottoman Empire and much of central Asia and Africa continued to live openly among their muggle counterparts.
Regardless, the ICW, which was mostly composed of European, Chinese, and Ottoman wizards at the time (since many other areas had been colonized by the Europeans), enforced the isolation of the world's wizards. Additionally, as new areas were discovered and colonized, European wizards, especially British, French, and Spanish, wizards of the ICW, made it a priority to find any wizards in the new culture and enforce their isolation from the muggle community.
However, muggles are smarter than the wizards were willing to believe, and anything missing can be reconstructed by the hole it leaves. In Europe, it was no longer the Dark ages or the Middle Ages; it was the middle of the Renaissance. Many were learning to read and write, thanks to the recent invention of the printing press. And while the average muggle, who worked in the field or the family shop, rarely if ever interacted with wizards, those in the upper class did so often (notably the Malfoys). After the Statute went into effect, many in the upper class muggle world noticed that their soirees were less populated than they had been and their schedules and journals contained references to wizards and wizarding culture. Convinced that the muggles would not be able to discover their world, the ICW maintained a minimal presence watching the muggles from a distance and failed to notice that the muggle world remembered the wizards. Behind closed doors, influential muggles decided to "live and let live". They would not seek out the wizards but would pass on the memory of them to their descendants.
Over time this legend spread to the lower classes and led to the popularization of many legends about the wizards and even the formation of a few cults. However, others hated the wizards because they had an annoying habit of wiping memories without regard for the muggle's well-being. In the late 1700s, muggle scientists released a guide, again mostly only available for the upper classes, on symptoms indicating a wizard has modified someone's memory in the last 24 hours: slower reaction time, eyes that glass over occasionally, and general forgetfulness. Strangely enough, this also led some of the scientists in the group to research strokes and how to prevent them. During the French Revolution, this information was discovered by some of the lower class and was eventually deemed important enough to distribute to everyone. Other countries noticed that the French lower class citizens now knew about the wizards and began to distribute the knowledge to their citizens. Despite the fears of some, witch-hunting hysteria had largely died down by that time, and few people decided to go looking for the wizarding world. Any who found a wizard were quickly obliviated and sent on their way. The ICW continued to remain blissfully unaware as the wizards continued to believe that the muggles had no knowledge of them whatsoever.
The greatest fear those in leadership had was of a war begun by wizards against muggles. Therefore, many governments of richer countries devoted considerable effort to finding ways to detect, imitate, and block magic. The muggle Nicolai Tesla was the first to discover that by applying a light electric current to the base of the skull, one could reverse the damage due to a wizard wiping one's memory. Legends of witches and wizards flying led several muggles to design flying machines, with the Wright brothers being the most successful. Eventually, it was determined that magic emits a low, non-harmful level of radiation. Intelligence services in the Cold War managed to discover all major wizarding settlements using this method. Many of these efforts included muggleborn in Europe, Latin America, and China, where remembered fear and hatred of muggles in the magical community had transformed to prejudice against muggleborn. Since the muggleborn usually knew that the muggles knew of the wizarding world, they were often able to find work for their country's government in some capacity.
Governments across the world were terrified that the Great War (WWI) was caused by wizards. However, despite the massive death and destruction, it was determined to be purely muggle in origin. This was a very sobering realization for most Europeans, as it was the first time they saw what level of destruction they could perform on their own.
In the 1940s, the muggles' greatest fear came true. A wizard propped up a muggle, Adolf Hitler, and brutally began to conquer Europe. Many exiled muggleborn fought for the Allies in special magical forces units, excelling at infiltration and exfiltration and disrupting enemy supply lines. Several muggleborns acted as diplomats and pleaded with the British Ministry of Magic and the ICW to get involved. However, it was perceived as a "European muggle matter" since Grindelwald wasn't openly targeting foreign wizards, and their cries fell on mostly deaf ears. However, a few British muggleborn were able to convince their old transfiguration teacher to intervene. Albus Dumbledore worked with the Expeditionary Magical Special Forces to track down and fight Grindelwald. Since there was concern of the wizards' response if they learned that the muggles knew about magic, Dumbledore was kept under the ruse that the EMSF was under the auspices of the ICW and was forced to swear an oath to never reveal their secrets. Thus, no one knew how Dumbledore had managed to find Grindelwald and get close enough to duel him.
Hitler's Final Solution horrified the muggles and many initially blamed it on the wizards. However, the atrocities committed by the Japanese in China and the Philippines and the stories of Stalin's brutalities that leaked out of the Soviet Union served to stay the hand of most governments and individuals. In an attempt to lessen these tensions and remind their citizens that many wizards fought and died against Grindelwald, several governments awarded heroes of the EMSF with distinctions of valor. Notably, one Harold Pine, of Britain, was awarded the Victoria Cross for his actions on D-Day. He survived the war and married his childhood sweetheart. They had several children, including a girl named Emma, who married a man she met in dental school, Dan Granger. It was ultimately determined during the Nuremburg Trials that Hitler designed and implemented his Final Solution on his own. However, when it was revealed that Grindelwald knew of it and did nothing to prevent it, he was removed from his self-made prison in Nurmengard, tried, and executed by a combined firing squad of muggles and magicals.
The story will mostly consist of a series of scenes from the perspective of several characters in the Harry Potter universe.
Harry – Growing up with the Dursleys, learning about magicals in primary school, finding his way to Kings Cross.
Hermione – learning about her grandfather from her mother, reading about magicals in a book, visit from McGonagall, attending Hogwarts as a muggleborn.
Dumbledore – his worries about trying to keep the muggles from learning the Secret
Have fun!