mysterious happenings is currently a work in progress.
for art-related purposes, here is a quick summary of lore etc.
MH takes place in a very slightly different version of our world as we know it. magic exists, as a form of very tempermental energy, however although most people have the ability to harness a small amount of magical energy (often showing itself as someone being naturally very skilled at something they're passionate about), some people/animals have the ability to channel even more magic in such a way it can manifest itself as different powers - wizards. when a wizard walks by or you pass a particularly magical place, you will likely feel a strong aura.
these powers can be related to one of the 8 schools of magic (abjuration, illusion, enchantment, divination, evocation, transmutation, necromancy and conjuration), or can be used to create potions (strong amounts of magic must be used to brew potions that actually have effects, otherwise a regular broth will be made - similar to how medicine differs to a regular drink)
wizards tend to just be... better at things. but of course, there are always exceptions to the rule- magic is a skill in itself, and requires a lot of practice.
magical creatures
magical creatures (werewolves/vampires/ghosts etc) also can be created when genes controlling the person's relationship with magic is changed in some way - this can be similar to how race is passed down through generations, however can also come about through disease or other circumstances. this also applies pretty much directly to animals - there are plenty of magical variations of animals, but they may be harder to spot.
familiars
familiars act as an extension of a wizard's soul. they are made of pure magic, and are a wizard's greatest companion. they have many physical properties (you can touch them, but it's generally frowned upon to touch a wizard's familiar), however wouldn't quite be considered "physical", they can move between planes of reality at will.
ardolph/the rift
ardolph astor and his subsequent generations of family can be attributed to discovering most things about how magic works- he discovered the first weak point into "the rift" - a seperate plane of reality that people may think of when they hear of "heaven". the rift can be accessed only by the strongest magicians - and be extremely careful, for if you stray too far from the inital entry point in the rift, things become more bizzard, and you will get lost. getting lost in the rift is truly a fate worse than death.
deities
deities are like familiars but on steroids. they each have a specialization in a school of magic and deal with various things throughout the world relating to this. similar to how a familiar is a piece of a wizard's soul, deities are a piece of the soul of the universe itself. most people speculate that they began as one, single "being" (what christians would refer to as "God") however during the big bang, they split into several pieces. if you see a deity, you are incredibly lucky.