In the late Pleistocene and early Holocene, a period known to laymen as the dawn of mankind, Charmander abounded in a desert east of Fuschia city. They used their flames to hunt bug and grass pokemon and were as abundant in this land as Zubat and Tentacool are in theirs, and dug surprisingly sturdy burrows to protect themselves during infrequent rainstorms.
It was climate change that did them in. Kanto is far wetter than it once was, and those few Charmander who tried to adapt to growing forests failed: leaves were a poor shield and there were no forests in Kanto with a thick enough canopy to prevent rainfall. In Kanto's Warring States' Era, the last patch of desert was converted into pasture by a local warlord and the wild Charmander became extinct.
Not all was lost, however, for man is a species which builds shelters and loves fire, and before they learned to rub sticks together they domesticated the Charmander, both for its valuable flames and its role in eating disease-carrying insects. In modern times they are still a fairly common household pet, although never as numerous as they were before the invention of the matchbox.