Seriously, every comment makes me more excited about what you're going to do with this game <3.
And my advice is to do something like youkai, basically each youkai has different powers and there are some specific ones that are very powerful (probably the most feared or are prayed to as gods) but the coexistence between humans and youkai depends more on a harmonious tolerance and an "avoid each other", and when there is a bad youkai that kills humans, a "god" or a exorcist kills them, and the same if humans start killing or enslaving youkai for their interests, well maybe a "demon" kills all humans to protect defenseless youkai (And if you realize, this is a cycle which is the main reason why youkai and humans can't truly coexist with each other).
My headcanon would be that there is a codependency between youkais and humans, that youkais make the world easier to live in (ecological allegory) and on the other hand, youkais need humans to pray to them to become gods (or fear and become demons). ), but due to their differences and racism this coexistence is very difficult, and since there are a large number of humans, the youkai end up hiding more from the humans while the humans always use the victim card lol.
This is all suggestion and headcanon (I have taken all this from Inuyasha, Ao exorcist, and Dororo), whatever you decide I'm sure I'll love it<3.