Gensokyo was originally a desolate, haunted region ages ago. The youkai that lived there began to terrorize the surrounding lands, and thus powerful, heroic humans were sent to exorcise and exterminate them. The off and on battle between humans and youkai continued on until Gensokyo was sealed off from the increasingly scientific and skeptical world with the creation of the Great Hakurei Barrier. There has been little contact between these societies ever since. Today, the only known gateway between Gensokyo and this outside world is the Hakurei Shrine, which stands in isolation along the border on distant mountains of the far east.
Gensokyo is populated mainly by youkai, fairy,dragons,elves and others but a decent human population lives there as well. Some of its inhabitants have come here to hide, to escape, to find shelter when no-one and nowhere else would accept them. Many of them just like the natural darkness.

The Great Hakurei Barrier is the border between Gensokyo and the outside world the creation of which marks year 0 on Gensokyo's Timeline. It is known that the Hakurei Shrine is located on the border.

It is the strongest boundary in all of Gensokyo, with Youkai reinforcing the original work done by humans. Yet it is not completely impenetrable. Examples of this include various individual people that have arrived through it The Hakurei Shrine is supposed to be the one gate through the boundary - this shrine exists on both sides of the border. Thus a lot of random items slip through and are found at the Shrine. Furthermore, people sometimes wander through the boundary and are either turned back with an illusion or they insist upon staying (in which case they're put in the Human Village for safety). However, Youkai teams sometimes go out to gather humans , hiding their activities with magic (lost people, accidents, etc). It's unlikely that the guardian of the gate would endorse such actions so presumably Youkai know of ways to make a 'hole' in the border elsewhere - they originally helped reinforce it after all.

Gensokyo, the area encompassed by the Great Hakurei Barrier, is a landlocked territory at least some tens of kilometers in diameter, although its exact size has not been measured. Notable geographic features include the Youkai Mountain with communities of yokai at its base, tengu at its peak, and the Moriya Shrine at a lake near the top; the Forest of Magic; the Bamboo Forest of the Lost where Eientei House of Eternity is located; the Misty Lake next to the Scarlet Devil Mansion; the Human Village and adjacent Myouren Temple, which in a fertile valley and the Hakurei Shrine at the east of Gensokyo.
Although passing through the Hakurei Barrier to the Outside World is virtually impossible for anyone it's significantly easier for Gensokyo denizens to access domains of gods, demons, and spirits which aren't strictly part of Gensokyo itself. These include the Netherworld, Heaven, the Dream World and the Underworld.