It almost certainly doesn't take place in the same world (probably not even the same universe) as the main series games. With OR/AS all but confirming that multiverse theory is valid in the Pokemon world, it's likely that PMD takes place in one of these alternate universes.
As for other humans in PMD's world, despite there being a few confirmed cases outside of the player characters such as Gengar from PMD1 having originally been a human, the Voice of Life as Hydreigon claims in GtI that the long-term presence of a human in the Pokemon world will cause spatiotemporal distortion (which was already mentioned in PMD2, where Cresselia confirms that the player does indeed cause a minor spatiotemporal distortion, but that it doesn't expand on its own). This implies that humans are not native to the PMD world. However, it's also contradicted by other things within the PMD game; not least of which is that the player does return in GtI without imploding the universe or whatever, with Hydreigon kind of hand-waving that away as the player overcoming laws of nature through sheer willpower or something. It also contradicts what we were told in PMD2; that, while it is true that the player causes a distortion, that distortion isn't dangerous on its own.
The short answer is it's never really explained and a lot of the information we are given contradicts itself. Personally, I think it's interesting to note that every human character we know of, including Gengar, ends up becoming a Pokemon at some point in time. Maybe the presence of an actual human does cause issues in the Pokemon world, but it corrects for that by transforming them into a Pokemon when an opportunity arises, which prevents the distortion they create from expanding any further. That doesn't really explain what Hydreigon says in Gates, but I like to pretend Gates was all just a bad fever dream anyways.