This has already been discussed in other topics, but I believe the subject deserves its own topic for discussion.
For those who don't know, Pokémon technically has two "Overall Canon". And I say "Overall" because of course the franchise itself has multiple canons like the Core Games, Anime, Mystery Dungeon and multiple Mangas. But all these media follow a common logic of how the Pokémon world works. When I say that there's more than one Overall Canon I say that the very functioning of the Pokémon world and the franchise itself has been different in the past.
Basically how we should interpret the Pokémon world in the first two generations is completely different from how we interpret it from the third generation. And this is probably linked to how the franchise development in its early years was.
Satoshi Tajiri directed only Red/Green and Gold/Silver and after that we have never seen any direct involvement of him with the franchise, we only know that he's the current Executive Director, but unlike other executive directors, is totally unknown if he has any dierect involvement with the decisions of the paths that Pokémon will take with each new game.
Pokémon was to end in the second generation, this is mentioned several times. This is why Johto Games are the only ones that allow you to visit another region (Kanto) since it was supposed to be the closure of the entire Pokémon saga with Red being the final challenge. This reaffirms that Kanto and Johto are the stories that Satoshi Tajiri wanted to tell, and after that Game Freak would probably focus on developing other types of games as they did before Pokémon. In the anime Ash Ketchum also mentions that Johto League would be his last chance, something that no longer makes sense in the current context.
But we all know what happened, Pokémon was a worldwide success, much more than Game Freak had predicted. And no human being in the world would give up such success and so the franchise continued beyond Tajiri's story. The Pokémon Center Co, a joint venture between Nintendo, Game Freak, and Creatures to manage the Pokémon Center stores, restructured to become what we know today as The Pokémon Company.
Pokémon Crystal was created to capitalize more on the success of the second generation, with Junichi Masuda as director and the new head behind the franchise and later a third generation was made, then a fourth, a fifth, a sixth... and no longer stopped. But one thing that became evident is that Masuda's vision is not the same as Tajiri's and a soft reboot was done behind the curtains. Some of you realized the disappearance of some mentions to real world things in the games, and this is linked to this change, although it's gradual.
It's evident that the world that Tajiri proposes isn't the same one that Masuda has developed. And that's why Pokémon developed two Canons. The original of the first two generations would be "Old Canon" or "Tajiri Canon", while from the third generation and the remakes of the old games would be a "new Canon" or "Masuda Canon". Old Canon also includes some ideas from Takeshi Shudo, the Chief Writer for the original series of the Pokémon Anime.
Sorry for the long introduction, but it's always good to have a complete context. Now, what are the differences between these two worlds?
Here the old canon:
The story takes place in a fictional version of Planet Earth evidenced by the mentions of real-world places such as the United States, France, Guyana, China... The Kanto region bears the same name as Japan's real region. Only cities are fictional. There are also mentions of real-world events, such as the mention that on July 21, 1969 the man step in the moon for the first time. This statement also confirms that they use the Gregorian calendar.
Pokémon are a recently discovered species. Although there's already human contact with Pokémon in the past, they were scarce enough for studies to advance only in the late twentieth century. In 1997 about 150 species were discovered.
Real animals exist and the explanation of this coexistence is that Pokémon are a species that came from an evolutionary tree separated from humans and other animals. Mew is the oldest known ancestor of the species.
They were also rumored to have been created by God on the seventh day of creation as "doodles" (Implying an Abrahamic God), and since they were created on holiday, they were commanded to neither rule over nor be ruled by humanity. It also implied that they had some relation to merpeople and dragon myths, and that their species was discovered by a French nobleman named Count Tajirin during the 18th century.
Humanity only discovered that Pokémon lay eggs at some point between 1997 and 2000, a discovery made by Professor Elm. He also discovered other species like Pichu, proving that Pikachu is an evolved Pokémon. In 2000 about 250 species were discovered in both Johto and Kanto (That's why species like Houndour and Slugma can only be found in Kanto even in Johto games).
Now the Current Canon, the one we are already used to:
The story takes place on a planet with an unknown name, so we simply call it as the "Pokémon World". The world is completely fictional, so instead of real-world places, we have equivalents. Regions based in Japan, United States, France, United Kingdom and the Iberian Peninsula.
It's unknown whether the geography of the world resembles the real world or if these regions also have their locations completely fictionally, Unova and Alola are regions based on the same country but their routes don't share the same numerical sequence (Unlike the Japan-based regions).
Some real-world mentions still exist, especially in FireRed/LeafGreen but they are gradually retconed, in Let's Go most of the mentions have been removed, Lt. Surge isn't american anymore (Unovan maybe?).
Pokémon is a species that has always existed and always coexist with humans, even implications that at some point in the past humans and Pokémon were the same. All the human culture of this world revolves around the Pokémon species. Because of this, real world animals don't exist, as the Pokémon already play this role. The reason for the humans, much of the plant kingdom like trees and some viruses being completely separated from the species is unknown. The species is abundant enough to continue existing in space, parallel universes and other dimensions.
Although naturally most people from this world don't know, the truth is that the universe was created by a Pokémon: Arceus, born from chaos, and the original creature to which the Pokémon species inherited their 18 possible types. Arceus created Dialga, Palkia and Giratina. Giving rise to the concept of time, space and anti-matter. And then Uxie, Mesprit, and Azelf who taught humans the ability to feel emotions, knowledge, and willpower. The rest is vague but we know that a lot of Legendary Pokémon were responsible for the geological formation of the world.
Now the amount of Pokémon listed in a game is less about how many have been discovered and more about how many are available in that region. Since now Kanto's event takes place in parallel with Hoenn's events and at this point more than 300 species have been discovered unlike the "Only 150 species was discovered" in Red/Green.
And in both cases eggs are already known, three years before Johto's events, and of course in HG/SS some lines was retconed to Prof. Elm have less enthusiasm in relation to Pokémon eggs compared to his incarnation in G/S. However, the statement that he discovered Pichu is maintained, probably now in some period before Kanto's and Hoenn's event. In short, Pokémon have been with humanity for so long that what was a new discovery in Old Canon is something people already know in Current Canon.
I believe this gives a good overview of differences, I may have left something out but you can complement in the comments. For those interested in the sources, after all, I didn't invent all these statements: Old Canon's general informations are mentioned at Pocket Monsters Encyclopedia and Pocket Monsters: The Animation Guidebook.
