So not trying to wander into flat earth theory here, But a hidden fantasy world (of elves) in the present day. How would we explain it. There is no contact whatsoever between the two world. Could there be some explanation having a tiny grain of reality / science/ logic in it without driving the whole thing into "on an alternative earth".
Deep oceans are not very well explored, it is possible that a relatively a few small cities can be there without human knowledge.
You will need them to deliberately avoid exploration, and you need to eliminate accidental discovery.
To keep them from exploring, have religion (e.g. they were abused by surface dwellers in the past), or some survival constraint: UV rays hurt them, they have to stay near vents that provide them with some essential nutrient.
It would help if they are in the deep ocean, so they are far from shores, and cannot be accidentally discovered by fishermen or divers.
You also want both their bodies and their artifacts to sink to the bottom rather than float up. Giant squid were discovered mainly b/c they float up when they die.
In fact, make their materials and technology biologic in nature, so they rot soon after being discarded. This way you cannot have a stray fish swallow some broken or loose piece, and later turn up in a fisherman's net.
Before the flat earthers rose into the general consciousness, the crackpot theory of the day was the Hollow Earth.
This particular theory was suggested by the otherwise laudable Edmund Halley in the 17th Century and lasted around 100 years before being comprehensively disproven in the late 18th Century. It then lasted in pseudoscience well into the 19th Century.
Religion has long postulated the presence of hot underworlds where souls go after death. Halley formalised this into the concept of concentric shells separated by atmosphere.
This would leave you with plenty of space for a hidden land of the Elves beneath ours, along with notable historic references for people suggesting it was true.
An extinct volcano.
During an Ice Age millions of years ago a volcano formed in the middle of the ocean and spewed billions of tons of lava along its flanks and which made its base very broad with a shallow angle. Over time the crust moved and access to the magma was blocked. The lava tubes though remained and created a vast underground cave. The ice receded causing the oceans to rise more than a hundred meters and cover all but the top of the volcano's peak which was about a mile wide. This peak allowed sun, rain, spores, seeds, insects, etc. inside the cave which began to support life.
A group of elves ventured away from their island to see what else the world offered and never returned home. They stumbled upon the remote volcano purely by accident, bringing with them domesticated livestock for eggs, milk, etc. and seeds for crops and fruit trees. They made a new home.
Meanwhile back on the main elf island a natural disaster wiped the entire colony of elves off the map (or maybe this small band of elves struck out after the disaster, or ...).
A one mile wide (or less if you chose) volcanic cone in the middle of an ocean with no other islands around would be very difficult to stumble upon if the currents and wind didn't usually go in that direction (perhaps a storm disrupted the normal currents and took the elves there.)
Take a look at Son Doong Cave which has a jungle and river inside.
I'd read up about Sentinel Island and it's native population. They are believed to be a cannibalistic culture and highly isolationist. They have violently attacked any members of the outside world who had the misfortune to be stranded off their island near India. One of the few incidents with survivors details an incident where they tried to attack a rescue helicopter with spears and stones and were clearly going to kill the crew if they so much as landed.
If your hidden village is under the sea, it could easily be "Under the Bermuda Triangle" or the "Devil's Sea" (a Pacific equivalent) and have had contact that was a bit more hostile than first contacts aught to go.
Mass migration to avoid a global disaster. The original intent may have been to return at some point but the duration of the disaster was so long that all information was lost about how to do so.
As for disasters, that could be an asteroid strike like the one that wiped out the dinosaurs, prior glaciation (global cooling), magical curse, etcetera.