@Juicy
Those are excellent questions!

Magic is the art of turning soul energy, or "mana," into physical energy. Mana binds the spirit to the body. A spirit is the "spark" that gives you life; it's what makes the difference between a corpse and a person. A corpse has all the ingredients for life, but without that "spark," or spirit, it will remain a corpse. Mana is needed to keep your spirit attached to your body, but most people have enough that expelling some of it won't kill them. Sleep is often sufficient to replenish it.

However, mere humans don't have much mana to spare, relatively speaking. Demons, and Voidspawn to a lesser extent, possess considerably more, enough to destroy whole worlds with nary a thought. So some humans will make contracts with demons to gain access to their great mana reserves and become "witches" and "warlocks" in exchange for letting the demon absorb an equivalent or greater quantity of mana from other people. However, if the seller uses more mana than the demon absorbs and becomes incapable of restoring the balance, the seller's soul becomes forfeit. Most sane individuals would rather not face the moral dilemmas and risks associated with such an arrangement and avoid it like the plague.
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The most populous species are humans, elves, orcs, and dwarves. Humans are characterized by their long lives (max 120 years), superior strength, dexterity, and durability. Elves trade strength for improved senses, and they can usually see, hear, smell, taste, and feel with more acuity than most other races. However, they are quite spindly, and their strongest male bodybuilders are little stronger than a typical human female soldier. Thus, the elves rely heavily on magic for their strength, and have developed superior mana reserves as a result. They tend to live in the eastern forests where they can draw upon the ambient mana to boost their powers. Their unnaturally long lives come not from any genetic ability, but from anti-aging spells. Without them, their average lifespan is about 50+ years.

Orcs are the polar opposite of elves. Ordinary orcs are at least as strong as some of the best human bodybuilders in the world, but their senses are about half as good. Big objects, loud noises, pungent smells, and such don't bother them. Magic requires a certain finesse that the dull senses of the orcs usually doesn't allow, so very few, if any, are capable of using it. Most live in the barren Fellmoran desert up north.

Dwarves are a little odd here. They're basically humans, but considerably shorter. Unlike in most fantasy lores, dwarves and halflings are both the same species; it's just that beardlessness is a heritable trait that some dwarven communities gather around. Most dwarves live in or around the dormant volcano out west.

All four major species are ruled by a monarch. Alexander Dragan rules the humans, Erudessa Durvain rules the elves, Innocent Patronus III rules the dwarves, and Throk of Westpier rules the orcs. There are other races in the world, like centaurs, fauns, satyrs, gnomes, gremlins, goblins, and such like, but they are not nearly as populous as the major four.

Technology is a little strange out here. Magic freely intermingles with it, and it's not uncommon to find a swordsman watching a video on his magic tablet while wizards rocket around in experimental steam-driven carriages. Dwarves tend to focus more on the tech side of things while elves focus more on the magic side of things. Orcs have neither the time nor the resources to focus on either, since they're too busy struggling to survive the harsh climates and incessant raiding parties.

So I guess technology is more Renaissance Era than Medieval.