[b]Technology[/b]
Something often over looked that plays a big role in setting the reality of this world
Having developed along side Pokemon gunpowder was never invented as there was no demand for it. People could kill eachother just fine with the monsters outside. Ancient man developed bronze tools to defend against pokemon back before pokeballs. Metal working has advanced enormously with easy access to energy and resources.
[i]*Engines are powered by electricity being that their is no oil or natural gas. [/i]
[i]*They have running water in the developed cities and in most towns
*Agriculture can be handled by a small amount of the population with the use of pokemon labor[/i]
[i]*Power plants convert the power of electrical Pokemon into a usable form[/i]
[i]*When pokemon evolve the turn into pure energy before they take their new form as seen in the games, they are turned back into that energy when put in a pokeball. They feel nothing in the pokeball basically suspended animaton[/i]
[i]*Mega evolution has always existed. Mega stones are blank before being used and can be used by any Pokemon, once they are used than can only be used by that combination of human and Pokemon.[/i]
[i]*Computers exists but only used for pokemon energy storage, A internet has yet to be invented.[/i]
[i]*Cars exist but are expensive and impractical[/i]
[i]*Phones are in their early stages but not wireless[/i]
[i]*Air conditioning is a luxury, requiring renting a ice type[/i]
[i]*Pokemon centers work but healing the Pokemon in their energy state, which requires enormous amounts of power[/i]

Large boats allow travel from Cianwood City in Johto to Lilycove City in Hoenn in about two weeks, Air travel has been restricted to large Pokemon but concepts are being worked on to allow for endless flight powered by a small electrical Pokemon.

[b]Government[/b] 
There are 3 major entities in each region
Pokemon League
Military
Small council

The Pokemon Leauge holds tournaments and gives challengers large amount of prestige and respect. It is quite common for some who have challenged the Elite 4 to go on and become generals in the Military. The Pokemon Leauge has no formal power in making decisions regarding the regions foreign policy however Gym Leaders are viewed as community leaders and the Elite 4 and Champion are always consulted in large region matters.

The Military is solely responsible for the defense of the region, Although not all regions have one.

[img]http://static.fjcdn.com/pictures/Loyal+arcanine+as+seen+on+facebook_7bd1fe_4625452.jpg[/img]

The Small Council of each region is made up of one senator from each city. They collectively make decision for each region and communicate with eachother as a group. Unova, Kalos, and Shinnoh however have an elected leader from their Small Council. This make negotiations with Kanto, Johto, and Hoenn take much longer needing to take every senators opinion into account.
Getting a place on the small council without 6+ badges from the regions league is near impossible
In the case any argument is left in a tie a battle is used to deiced the outcome, wars have been started and ended with one on one tie settling battles.
The small council collects taxes and funds pokemon centers for free healthcare

Each city has a small local police force but they are usually understaffed and under funded

[i]The Champion of the Pokemon League is almost always the leader of the Military as they are usually the finest trainer in the land[/i]